Massachusetts Home Selling Costs
Do you know all the costs involved in selling a house? In life, surprises are great, except when it costs you money! While selling thousands of Massachusetts homes over the last thirty-seven-plus years, I realized many homeowners do not realize all the costs of selling a home.
The #1 closing cost for Massachusetts home sellers is the tax to sell their home.
One of the most significant expenses overlooked is the Massachusetts tax stamps. Below, you will find a detailed summary of all the costs of selling a Massachusetts home,
Knowing all the costs to sell a home will arm you well to have your financial house in order, whether you are buying another home or renting.
Massachusetts Tax Stamps
Once you live in Massachusetts for a while, you realize that the government taxes everything.
I have found, however, that most Massachusetts home sellers do not realize there is a tax on selling a home if they have not done a transaction before.
It’s not hard to understand that if you have never sold a Massachusetts home before, you may not realize there is a sales tax. This tax on selling a home is known as the Massachusetts tax stamps.
In most of Massachusetts, the tax stamp equals $4.56 per thousand dollars of the home’s sales price.
So, for example, if you sell your home for $300,000, you would owe the State of Massachusetts $1368.00 ($4.56 x 300). The registry in which your home resides gives the income from the tax stamps to the Commonwealth of Massachusetts Department of Revenue.
Most of Massachusetts, including Middlesex, Worcester, and Norfolk Counties, taxes properties at a rate of 4.56 per thousand dollars. However, it should be noted that the local land bank commission forwards an additional 2% of the sales price charged by Dukes and Nantucket Counties, resulting in slightly higher costs for selling properties in that district.
Barnstable County has a higher tax rate of $5.70 per thousand in that district.
Massachusetts Real Estate Commission
Realtor commissions are, of course, the most considerable expense when selling a home. One should emphasize that brokerage firms can negotiate commissions and are not set in stone.
An individual Realtor in one company may have a different rate from another.
In many firms such as RE/MAX, the commission a Realtor charges is entirely at their discretion. Generally speaking, most full-service Real Estate companies will charge anywhere from 4% to 7% commission. The vast majority falling between 5% to 6%.
A discount brokerage often will charge less but not offer the same services.
Massachusetts Attorneys Fees
I firmly believe that every seller should have an attorney review the documents in a Real Estate transaction. The expense of having a competent real estate attorney representing your interests is cheaper than dealing with the cost of problems that could arise without proper representation.
A Real Estate attorney in a home sale can do everything from reviewing legal documents such as the offer contract and the Massachusetts purchase and sale agreement (P&S). They can also attend the closing with you or with power of attorney.
Keep in mind it is illegal for a Realtor to be giving legal advice.
Most buyers will have an attorney who will make changes to the standard P&S. You will be putting yourself at risk without a complete understanding of the purchase and sale.
The cost of legal representation can vary greatly depending on what the attorney is asked to do. As a ballpark, you can expect to pay anywhere from $500-$1500.
You will be closer to $300-$800 on a standard purchase and sale review. The expense will likely be closer to $1000-$1500 if you have a more complex transaction, and the attorney will attend the closing for you.
Massachusetts Title V
The Massachusetts Title V is a home sale expense every seller in Massachusetts has to pay unless they are serviced by public sewer. The law states that the transfer of Real Estate requires completion of a Title V unless there is no mortgage.
Lenders require a passing Title V. In the event of failure, some lenders will let you escrow an amount set aside to provide a new system. The escrow amount is usually 1.5 times the cost of the new septic system.
You can expect to pay around 800-1200 dollars for a Title V inspection. The cost could become higher if the septic tank or distribution box is in an area that is hard to reach.
The Title V inspection should also include a charge for pumping the system. A Title V septic inspection is good for two years. If you pump the tank for all three years, it will be extended for a third year.
Smoke Detector and carbon monoxide detector certification
In Massachusetts, you must have your smoke and carbon monoxide detectors inspected before closing, as it is a state law.
These inspections are done by the local fire department in which you reside. The charge for inspecting the smoke and carbon monoxide detectors is typically around $25-$100.
You should be aware that there have been new regulations surrounding Massachusetts smoke detector laws. The new law could impact the cost of selling your home if you need to install more or new detectors.
Preparing A New Massachusetts Deed
In Massachusetts, it is the seller’s responsibility to prepare a new deed for the buyer. The new deed will be recorded in the registry.
The attorney representing you usually prepares a new deed, which costs $100-$150. The lender’s lawyer can do it if you do not have legal representation.
Miscellaneous Closing Costs
There will also be some minor miscellaneous expenses for mailing and filing fees. At closing, they will add them to your HUD settlement statement. These fees include overnight mailing, courier services, wiring expenses, processing mortgage discharges, and recording fees for the various documents at the Registry of Deeds.
These miscellaneous expenses will usually amount to a couple hundred dollars.
Massachusetts home selling costs are pretty straightforward when you know what they entail. Real Estate surprises, however, are never fun, especially when they involve taking unexpected money out of your pocket! Use this list of home selling costs in Massachusetts to plan!
Nobody likes unexpected expenses. These are the Massachusetts closing costs you will deal with as a homeowner.
About the Author: The above Real Estate information about Massachusetts home selling costs was provided by Bill Gassett, a Nationally recognized leader in his field. Bill has expertise in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications he has been featured in. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 37+ years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.