What Are the Seller Closing Costs in Minnesota?

seller closing costs in Minnesota

And how to save approximately $7,706 in real estate commissions on a typical $256,857 MN home at closing by selling your home For Sale By Owner on Houzeo?

Congratulations! You’ve made it to the final process of home-selling. Closing on a property can be one of the most rewarding things as a seller, but can also be a tough one if you aren’t equipped with knowledge. The state of Minnesota is one of the most expensive states when it comes to closing costs. There are several regulations that also makes it one of the most tedious states. As a Houzeo For Sale By Owner (FSBO) seller, we assume you are ready for the closing. Our comprehensive Minnesota FSBO Home Seller Guide will assist you to accomplish exactly that.


Did you know Houzeo’s Gold Plan provides relevant Federal and State Seller Disclosures?


In this section, we’ll discuss the key documents and expenses you need to be aware of when closing on a home in Minnesota.

What Are the Different Home Seller Closing Costs in Minnesota?

Here are the typical closing costs in Minnesota you have to know:

  1. Mortgage Payoff: (fee varies on your lender) One of the most important items in your list of fees is the mortgage payoff. If you haven’t paid this off, now’s the time to pay the remainder. This includes items such as the recording fee, principal balance, interest accrued from the last payment, or any statement fee the lender might charge.
  2. Real Estate Broker Commissions: TIn Minnesota, commission fees usually are in the average of 6%—generally 3% of the fee going to the listing agent and the other 3% to the buyer’s agent. The seller’s closing costs can go around 5% of the purchase price if the property is anywhere near the average home sale in the Twin Cities. If you’re selling FSBO via Houzeo, congratulations… You’ve likely saved thousands by paying $0 in listing agent commission! Go on. Pop a bottle of the finest Champagne or Scotch. You deserve it.
  3. City Transfer Taxes or Stamps: Also referred to as deed taxes. The state typically issues transfer taxes to handover your property’s deed to the new owner/buyer. In Minnesota, you are charged 0.33% of your home’s price. Furthermore, Ramsey counties are charged for an extra 0.01 due to the Environmental Response Fund or EFR Tax. The collected fee goes to the county treasurer, which means 97% goes to the state general fund. While the rest of it goes to the administrative expenses.
  4. Property Taxes: These are outstanding payments, or prorated property taxes, utility bills, or homeowner’s insurance that are all tied into your property. You may need to pay the buyer a prorated amount of property taxes, or the buyer may need to credit you.  
  5. Title Insurance: The title insurance policy provides buyers the protection from any financial loss or unexpected problems with the property. It’s a complete guarantee that the purchaser gets a clear title to the property, free of other legal encumbrances that could threaten the buyer’s interest in the property. Sellers usually pay about $1000 for the title insurance.
  6. Attorney Fees: During the closing process, attorneys play a vital role—from preparing all the documents to taking care of essential contracts. In Minnesota, attorneys could either charge by the hour or a one-time fee. You’ll be charged for at least $1000 for all the services and paperwork.
  7. Escrow Fees: There can be a neutral third-party representative from an escrow company that handles the transfer of the deposits, documents, funds, and other key items in a closing. Usually, escrow charges $2 per $1000 in the sales price, which covers the services during the closing day.
  8. Property Survey: Home surveys in Minnesota typically cost $450 to determine the boundary of your property, and so the buyer could get an assurance of what they’re actually paying for.
  9. Seller Paid Home Warranty: Some homebuyers in Minnesota often ask for a home warranty, a fee that covers the cost of home repairs in case of damage. The average cost can be around $300 or more, varies upon the area, coverage, and the insurance company.
  10. HOA Dues and Document Fees: If the property falls under a Homeowners Association, you may be subject to various other charges. These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow
  11. Home Inspection: Costs around $286 to $383, the home buyer can request and perform a house inspection to know any major issues or flaws with the property.
  12. Recording Fees: In order to document the sale and transfer of your property to the public record, you have to pay for a fee that could vary depending on the county you’re in.
  13. Special Assessment Search: It’s a charge imposed on the property for a local improvement that benefits the property. “Special assessments are one of the ways a local government may collect money to pay for local improvements.”


How Should I Prepare for My Minnesota Home Closing?

Your closing agent will schedule a date for your closing. Here’s how to prepare for your closing day.

  1. Review Your Closing Documents in Advance: Closing documents should generally be available to you in advance of the scheduled closing date. Review these documents at length and understand their provisions. Here are some key documents you’ll likely sign at closing:
    1. The HUD-1 or Closing Disclosure: Most Minnesota homes are purchased with a mortgage. If this is the case on your transaction, you’ll get the Closing Disclosure summarizing the costs in detail. If your transaction is all cash, you may get the HUD-1, although this is less common. These documents detail amounts you’re being charged for, your loan payoffs if any, and the net proceeds you will take to the bank. Remember, depending upon how much equity you have in the property, you might be asked to bring a check (or send a wire) on the closing date. Ensure there are no typos in your name, address, property address, bank info, and other details. Then review every amount and the totals to ensure there are no mathematical errors or inadvertent costs. You’ll be surprised how many times these documents have errors – this is one of the reasons our founder launched Houzeo.
    2. The Deed: This document enables the legal transfer of title from the seller to the buyer. Read this document carefully, verifying all details including the legal description of the property, the deed book, deed book page, and the Property Identification Number (PIN), if any. We know of a case where a Seller sold a $94,000 property, but the deed also legally transferred over the Seller’s 5 other homes worth $680,000 over to the Buyer. There was a huge scramble post-closing to correct this mistake. It could have been a nightmare for the Seller if the Buyer didn’t honestly transfer the rest of the properties back to the Seller.
    3. Statement of Closing Costs: This statement summarizes all the expenses involved in the transaction. This document is easier to understand vs. the HUD-1/Closing Disclosure, but they should tie.
    4. Certificate of Title: Allows you to state that you have the right to sell the property.
  1. Ask Questions: If this is your first time selling a property, schedule an appointment with the closing agent before the date of the closing. Prior to that appointment do your research and ask clarifying questions on anything you have doubts about.
  2. Bring TWO Forms of Official ID, Keys and Garage Remotes, and Final Water Meter Reading: There will likely be a licensed notary involved who’ll require that you swear you are who you say you are. Take a valid driver’s license or passport for ID. Carry a secondary ID as well, just in case. Don’t forget to bring the keys of your property.

Now you’re ready! You might’ve heard horror stories of people being blindsided by high closing costs in Minnesota – but that’s often the result of not preparing and educating themselves ahead of time. If you are a Houzeo For Sale By Owner Seller in Minnesota, we want you to be one of the most educated home sellers out there. Next step, log on to Houzeo.com and list your home for sale by owner. You’ll be in full control of your listing, and save thousands in the process!

Note: This is only a quick guide for all the sellers in Tennessee. Despite most information readily available online, seeking expert advice helps progress the process of selling a home.


Did you know Houzeo’s Gold Plan provides relevant Federal and State Seller Disclosures?



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