Congratulations! You are in the final stretch! However, the joy of finalizing the real estate deal brings with it the stress of financial planning. Closing costs in South Dakota are a sum of expenses you should plan for when buying or selling a house.
- Closing costs or “settlement costs” are a set of final expenses paid for completing a real estate transaction.
- The seller and the buyer both pay closing costs in South Dakota.
- The 3 major Seller Closing Costs in South Dakota are:
- 1. REALTOR Fee
- 2. Recording Fee
- 3. Escrow Fee
- The 3 major Buyer Closing Costs in South Dakota are:
- 1. Loan Origination Fee
- 2. Escrow or Impound Account
- 3. Appraisal Fee
- In South Dakota, real estate transactions are usually closed by title companies or attorneys.
What are Closing Costs in South Dakota?
Closing costs in South Dakota are a sum of fees that have to be paid to different stakeholders. Closing costs are essential for finalizing the real estate deal and transferring the ownership of the house. These settlement costs are paid in addition to the net property amount.
Who Pays Closing Costs in South Dakota?
Both the buyer and seller pay certain closing costs at the end of the real estate transaction in South Dakota.
The seller shells out a higher monetary amount as closing costs as they pay the REALTOR commission. Other fees, like documentation charges, transfer fees, etc., are paid by the buyer.
Some closing costs are negotiable, while others are non-negotiable, like taxes charged by your state or local jurisdiction.
Depending upon the condition of the South Dakota real estate market, the buyer or the seller can negotiate their share of the closing costs. For example, in a buyer’s market, the seller may have to bear a portion of the buyer’s closing costs.
Who Pays Closing Costs on FSBO in South Dakota?
For Sale By Owner (FSBO), property sellers do not have to pay heavy real estate agent commissions. Further, if they sell South Dakota home with a flat fee MLS, they can save a significant amount of seller closing costs. However, they will have to pay certain closing costs. Some of these are:
1. Transfer Taxes (0.11%-2.2%)
Transfer tax is charged by the state and/or municipality before the ownership is transferred from the seller to the buyer. In South Dakota, the transfer tax is levied by the county.
2. Seller’s Attorney Fees ($150-$350 an hour)
The law in South Dakota does not mandate the presence of an attorney for FSBO real estate transactions. However, it is highly advised to hire a real estate attorney for FSBO deals to avoid any type of legal risk.
A real estate attorney guides the owner in preparing the necessary documents like the seller’s disclosure in South Dakota and drafts of other legal paperwork.
South Dakota real estate attorney fees range from $150-$350 an hour.
» Sell My House on My Own South Dakota: Here’s how to sell a house without a realtor in South Dakota.
3. Pre-listing Appraisal ($400-$600)
FSBO sellers may have to invest in the pre-listing appraisal, as it would help them find an appropriate buyer in less time. This will, in turn, lower the number of days on the market and make the sale faster.
» Home Appraisal Fee South Dakota: Read more about this South Dakota closing cost.
How Much are Closing Costs in South Dakota?
The closing cost in South Dakota for sellers is approximately 8%–10% of the home’s agreement value, while the buyers are expected to pay around 2%–5% of the home’s purchase price.
Let’s put this in perspective! The median home value in South Dakota is $769,405. So, if you are selling a house in California, you may have to pay $61,552- $76,940 as closing costs. On the other hand, if you are buying a house in California, your closing costs may range between $15,380 to $38,470.
How Much are Closing Costs for Sellers in South Dakota?
As mentioned above, when selling a house in South Dakota, you will have to pay some closing costs to legally transfer the house ownership to the buyer. These costs include several fees that need to be paid over and above the net price of the property.
Some seller closing costs are negotiable. Real estate agents in South Dakota usually have information about who pays what at closing and can help you save on closing costs.
Here are some of the prime seller closing costs in South Dakota.
1. REALTOR Fee
The seller pays real estate commissions to both the listing agent and the buyer’s agent.
So, how much are realtor fees in South Dakota? South Dakota real estate commissions usually amount to 5%-6% of the agreement value.
» How To Negotiate Real Estate Commission: Check out this blog to find how to negotiate REALTOR commissions like a pro!
2. Recording Fee
The recording fee is paid by the seller to make the real estate transaction a matter of public record. In South Dakota, the recording fee ranges from $600 to $700 across different counties.
3. Escrow Fee
An escrow agent is an unbiased third party who helps you and the buyer complete the transaction. They clear the house for sale, transfer the ownership to the buyer, and the respective funds to the seller.
The escrow fee is the remuneration charged by the escrow agent for their services.
4. Home Inspection Fee
Sellers can opt for a home inspection to identify any major defects and issues, like plumbing issues, water damage, mold, appliance malfunction, etc., in the house that they must resolve before selling.
This can be done before the property is listed on the market (pre-inspection) or just before the closing. The average home inspection cost in South Dakota is around $400-$600.
The buyer can also undertake a home inspection. However, if they find undisclosed defects, it might give them the upper hand during negotiations, or they may back out of the deal.
» How Much are Sellers Closing Costs in South Dakota: Get a detailed overview of closing costs for sellers in South Dakota.
How Much are Closing Costs for Buyers in South Dakota?
These are the closing costs paid by the buyer while acquiring the property ownership from the seller. Like seller closing costs, these too are negotiable. Hence, hiring a buyer’s agent can help you save on closing costs.
We have listed some of the prime buyer closing costs.
1. Loan Origination Fees
Some South Dakota mortgage lenders charge buyers a loan origination fee to execute the loan with other respective documentation and legal formalities. The loan origination fee usually amounts to 1% of the mortgage loan amount.
2. Mortgage Escrow Account/ Impound Account
A part of the buyer’s monthly mortgage payments are reserved in an escrow or impound account by the mortgage lender. This reserve is maintained to pay the property tax and homeowners insurance premiums.
A mortgage servicer manages the mortgage escrow account and makes the payments on behalf of the buyer.
3. Appraisal Fee
Appraisal fees are paid to the professional appraiser who assesses the home value and ensures you get the best competitive price.
The cost for home appraisal in South Dakota varies between $300 and $500, depending on the property characteristics like its actual saleable area and its geographical location.
» Average Closing Cost in South Dakota for Buyer: Here is a detailed breakdown of closing costs for buyer in South Dakota.
4. Title Insurance
Title insurance is offered by a title company to protect the insurer against any type of loss with respect to any outstanding taxes, unpaid dues, default in the title, or any violations. A policy of title insurance in SD could cost around $200-$250.
» How is Title Insurance Calculated in South Dakota: Find out more about this closing cost to protect your investment in SD.
How are Closing Costs Calculated?
It is important to calculate closing costs while selling a house or buying one.
The estimated closing costs give sellers an idea about the home equity they will have after the sale and helps buyers find out the amount they will have to pay over and above the agreement value of the house.
» Closing Cost Calculator: Check out the closing costs calculator for calculating the closing costs for your real estate transaction.
How to Calculate Closing Costs for Seller?
Houzeo’s Home Sale Calculator helps calculate closing costs for sellers in South Dakota with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission and voila!
The Seller Closing Cost Calculator even gives sellers the estimate of their home inspection fee and home warranty fee. With the help of this home sale proceeds calculator, sellers can find out their home equity and be prepared for closing.
» South Dakota Seller Closing Cost Estimator: Check out the seller closing costs calculator for calculating the closing costs for seller.
How to Calculate Closing Costs for Buyer?
Houzeo’s Buyer Closing Cost Calculator helps calculate closing costs for buyers in South Dakota. For finding the estimated buyer closing costs, the buyers have to add the property location, home purchase price, and the down payment in the buyer closing cost estimator.
The closing cost calculator for buyer gives a detailed list of the buyer’s estimated closing costs.
Home buyers can find out everything right from origination fee, appraisal fee and survey fee to title search, attorney fee, recording fee, prepaid interest charges, escrow property taxes, and owner’s title insurance.
The Buyers Closing Cost Calculator even shows which fees have to be paid before closing and which ones have to be paid at closing.
» Buyer Calculate Closing Costs in South Dakota: Check out the closing costs calculator for buyer for calculating the closing costs for buyer.
Closing Costs in South Dakota for Refinance
Before we dive into closing costs for refinance, let’s look at the term refinance:
What is Refinancing?
Refinance, also called “Refi,” is nothing but replacing your current loan with one that offers a lower rate of interest. This helps lower monthly mortgage payments.
How Much are Closing Costs in South Dakota for Refinance?
Refinancing closing costs are the sum of several expenses paid against any services that were used in the process of underwriting and closing on your mortgage loan, which makes up 3%-5% of the mortgage amount.
The closing cost for refinancing would vary with respect to the property’s location. Overall, South Dakota mortgage refi closing costs are the highest in the nation.
Junk Closing Costs to Watch Out For
Junk costs are the additional costs that are imposed by the mortgage lender. These are usually excessive but can be challenged and negotiated for a fairer price. Some of these are:
- Application Fee: The buyer pays this fee to the lender when applying for the mortgage. Not all lenders charge an application fee.
- Loan Processing Fee: This fee is charged by the lender to execute the loan once it has been approved. Borrowers can negotiate for these charges to be waived.
- Mortgage Rate Lock Fee: This fee is a guarantee that the lender will honor the pre-agreed interest rate for a said amount for a set period.
- Underwriting Fee: Mortgage underwriters charge underwriting fee to evaluate and verify loan applications. It is a non-recurring fee. Some lenders charge it in place of the originating fee, while others charge it in addition to the same.
- Courier Fee: A fee of $20-$50 is typically charged in order to cover the courier transactions.
Note: The costs vary by region.
The closing cost in South Dakota is the mandatory fee that needs to be paid by the seller & the buyer. This is paid over and above the mortgage loan amount. Where the buyer pays 2%-5% and the seller pays 6%-10% against their share of the closing cost.
If you have just started planning to sell a house and are considering SD For Sale By Owner, we encourage you to get in touch with us. Houzeo.com is the best and most advanced flat-fee MLS service that can help you get eyes on your listing without the need for an agent.
Houzeo’s customer-centric approach, advanced technology, and flat fee packages make it an ideal choice for those looking to avoid paying high commissions and closing costs.
Frequently Asked Questions
1. How much are closing costs in South Dakota?
The closing cost in South Dakota for buyers are approximately 2%–5% of the home’s agreement value. While the sellers are expected to pay around 6–10% of the home’s purchase price. For sellers, that includes the agency commission too.
2. How much are closing costs in South Dakota for buyer?
The buyer closing costs are the charges paid by the buyer while acquiring the property ownership from the seller. These charges included several fees that need to be paid over and above the agreement amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
3. How much are closing costs in South Dakota for seller?
The seller closing costs are the charges paid by the seller while transferring the property ownership to the buyer. These charges included several fees that need to be paid over and above the agreed amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
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- How to Flip a House in South Dakota: If you want to flip houses and make a profit in South Dakota, we explain what you need to know.
Eager to Know How Houzeo Works?
We’ve got you covered. Check out the following video to understand how Houzeo works and why it is one of the best For Sale By Owner websites in the U.S.
What is Houzeo?
An overview of what the platform is all about
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