What’s the truth about Closing Costs in Delaware?
Let’s Ask the Broker: The cost to purchase your new home can vary greatly depending on the closing costs and various fees associated with the particular community or municipality
But let’s start at the beginning, which costs are paid by the Seller and which are paid by the Buyer before and during settlement?
The Sellers’ Closing Costs
When you sell your home in Delaware, you are responsible for:
- The total real estate commission that may then be split between the listing brokerage and the buyers’ broker.
- The cost of any repairs that need to be made as a result of the home inspection.
- Half of the Transfer Tax (4% of the purchase price) which is 2% of the purchase price. (Effective January 2018, it increased from 3% to 4%.)
- Deed Preparation.
- Any applicable wiring fees related to mortgage satisfaction.
- The costs of any POA (Power of Attorney) if required.
- If the Sellers’ property has a septic system, the full cost of inspection by Class F & Class H Certified Septic Inspector.
- Any required repairs to the septic system or replacement.
The Buyers’ Closing Costs
When you are purchasing a home in Delaware, you are responsible for:
- The cost of any inspections – Home Inspection, Termite Inspection, Radon Inspection, Well and Septic Inspections or any other inspections required by the Mortgage company. These costs are normally paid when the inspections are ordered.
- Attorney Fees and Title Inspection and Insurance.
- Survey of the property.
- Document preparation and recording fees.
- If you are getting a mortgage –
- Appraisal Fee
- Credit Report
- Flood Certification
- Pre-paids as required for homeowners insurance and any assessments
- Escrow payments for the next 12 months of property taxes and insurance
- Any loan origination charges
- Initial Capital Contributions if there is a Homeowners Association or Condo Association.
- Any water and sewer impact or connection fees if applicable.
- Any hookup charges for gas or electric service.
- Current Association Fees (current month or quarter).
- Property Management Fee or Setup Fee if applicable.
New Construction vs. Existing Homes
When buying or selling an existing home in Delaware, it is tradition that certain closing or settlement costs are split between the parties. Specifically, the Transfer Tax of 3% of the Purchase Price is split between the Seller and the Buyer. Of course, everything is negotiable, but this is how it is typically done.
With new construction, it depends on the builder. Some do split the Transfer Tax while others do not. Some builders do contribute a set amount to offset closing costs and that amount is always subject to change. At Active Adults Realty, your Buyer Agent can always provide an estimate of closing costs for specific neighborhoods you are considering.
With a new to-be-built home in a new community that has more than one builder, the settlement costs can be very different with each builder. We make sure that you understand all of this prior to making a purchase decision so there are NO SURPRISES at the settlement table.
Buyers, got Questions? We have Answers.
It’s not unusual to have questions. We recommend that you prepare yourself for the journey by educating yourself. This will ensure you are a knowledgeable home buyer prepared to make a confident home buying decision. CLICK HERE to read our Buyer’s most Frequently Asked Questions, a.k.a. our FAQs page. If you don’t see the answer, email us, we look forward to helping you!
Ready to be a LOCAL?
Call 302-424-1890, or email us, let’s get started on your move to Delaware today!