Seller's Estimated Costs
Seller's Estimated Costs is a RESPA law mandated document to be signed by the seller(s) before closing. This is the agent's best estimate on what the costs will be for the transaction. It's not going to be exactly accurate, and that's why it's just an estimate. As a listing agent, you should be giving an estimate on closing costs at the initial consultation with their initial listing price, as well as the sales price BEFORE they sign the offer. If the price is changed at all, you need to do it again. See below for a video, or scroll down for written instructions.
The form is titled "Seller's Estimated Costs" and it's a PAR document. Search your templates for "SEC" for the correct form. Please remember to save frequently in case it times out or crashes. You can save the flat numbers into the template to save time, as well. This example assumes a sales price of $250,000 in Hampton Township.
- Broker's Fee is the amount of commission the seller is paying. This is found in the listing contract. Remember the seller usually pays both the listing agency commission and the buyer agency commission so include both in the calculation. If there is an admin fee also in the listing contract, include that here as well. There's space to write on that line, so you can put "6%, plus $750 admin fee" on that line. If the commission is 6% total, it works out: 0.06*250,000 = 15,000. On the cost line, you can put $15,750 for total Broker's Fee.
- Preparation of Deed is usually around $250. Some less, some more depending on the lawyer/title company. Ask your prefered vendor.
- Transfer Tax is a variable depending on where the property is and the sales price. For any property there are three taxes: state 1%, then a variable municipality percentage, and a variable school district percentage. For Hampton Township, you have 1% state, 1% Hampton Twp, and a 0.5% Hampton Twp School District. Total of 2.5%, but USUALLY that is split between buyer and seller equally. This is something that can be negotiated, so please check your contract for accuracy. Your seller is paying 1.25% as their transfer tax. 250,000*.0125= $3125.
- Seller's Assist/Credit to Buyer is negotiated in the contract. This example has $0.
- Home Warranty is variable depending on the company, but if you know what your preferred company you can fill that in there. $495 for this example.
- Municipal Certifications depends on what the local government charges. You can check online on the municipality website or call for accurate numbers. Some require dye tests and occupancy inspections, while others do not. $175 is a ballpark estimate if you can't find those numbers.
- Certificate of Resale (HOA/Condo Association) is not applicable to all properties. This is specific to HOA/Condos. Sometimes they pay ahead of time. This example has $0.
- Settlement Fee depends on the title company, but you can ask your preferred title company for their number. $250 is a normal to high amount to put here. The buyer legally picks the title company, so you won't know for sure who they are picking when looking at offers.
- Notary Fees vary as well. Depending on circumstances, it could be higher, but a normal closing where everyone is at the closing table is usually $25.
- Survey is not required in Western PA, so you can put $0.
- On Lot Sewage System Pumping is not too common, and usually paid outside closing. $0
- Property Repairs are paid outside of closing. $0.
- Tax Certifications can be estimated at $175.
- Overnight/Express Mail Charges are usually around $50 if there is a wire fee or if something needs to be mailed express.
- Domestic Lien Search is $0
- "Patriot Act" Search is $0
- Other can be anything else that needs to be paid.
- Estimated Costs (subtotal) is where you add up all the costs from above. This example is $20,395.
- Adjustments (line 27) is information from the seller on if they have an more liens. If they don't know, you can leave it blank and just tell them to check it out with your estimated costs in mind.
- Total Estimated Costs/Adjustments (line 29) is the estimated costs plus the liens.
- Purchase Price (line 31) is the contract price. This example is $250,000.
- Total Estimated Costs/Adjustments (line 33) is just a repeat of line 29. The costs plus the adjustments.
- Estimated Proceeds before loan payoff (line 35) is the Purchase Price minus total costs.
- Seller's Estimate of Mortgages, Equity, and other loan balances (lines 38) this is what they owe on the property still. If they paid off their mortgage and have no other HELOC/anything, it's $0. This is info from the seller.
- Estimated Net Proceeds to Seller is the final number. Line 35 minus like 38. This is their estimate on what they're walking away with.
