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This guide will teach you everything you need to about the costs associated with selling your house in Colorado.
Are you ready to learn just how much you should expect to pay when selling in Denver, Lakewood, Arvada or anywhere in Colorado?
Table of Contents
Are you asking how much does it cost to sell a house in Colorado?
Great! This is a comprehensive look at how much you will pay when you sell your house in Colorado including repairs, inspections and closing costs.
Be prepared for this shock…maybe sit down and take a deep breath.
Did you know selling a house will cost you 10’s of thousands of dollars!
It is very expensive to sell a house and most homeowners don’t realize just how much it can be. The expenses rack up very quickly and can include:
- Renovations to the house before listing.
- Inspection repairs
- Closing costs.
This is just three examples of expenses you will incur when selling in Colorado. Don’t let these fees or any others be a surprise. Right here you can find out everything you need to know about what it will cost to sell your house in Colorado.
Are you ready to learn about selling costs?
Closing costs for owners selling their house in Colorado. Just how much are they?
There is a ton of paperwork, legal documents, and more. That makes selling a home very complicated. Of course, this also column makes it more expensive.
In Colorado, it is common for closing costs to reach 10% of the sales price – OR MORE!
Sellers often wonder why the closing costs to sell a home are not fixed. Aren’t the documents the same regardless of if your house sells for $300,000 or $1,000,000?
Quite frankly, I agree. I cannot completely explain why closing costs are based on the percentage. That said, typically the more expensive houses the lower the closing costs are as a total percentage. If you are selling a house in Denver that is valued at $500,000, expect to pay about 3% or $15,000 to cover all the closing expenses. However, this doesn’t include the agent commissions. Currently, the cost to use a realtor to sell your house will be around 6% or roughly $30,000 for the same $500,000 dollar house. Who said selling a house is cheap?
Prior to listing your house on the open market, it’s important to understand what you’re going to be paying and closing costs, and how you can maximize the cash in your pocket. Personally, when I am looking to save money during a transaction, I look for the largest expenses first. In the case of selling a home, it is clearly the real estate agents, commissions, and fees. Clearly, if we could lower this, we would be saving a lot of money during the selling process.
If you sell by yourself, you could half the agent commission. Another option would be selling to a real estate investor which would eliminate the commissions entirely!
Selling to a company that buys houses for cash can be a great choice for a lot of people and certainly something you should consider because a cash sale incurs lower closing costs AND in fact, you can have a cash buyer pay for all closing costs if you play your cards right and learn how to negotiate a cash sale.
If you need to sell your house and want to learn more about the cost to close when selling the traditional way in Colorado keep reading.
Closing Costs: What are they and do I have to pay them?
If you are the person selling a home, closing day is the finale of the entire process. Closing day is when it all comes together at the title company. The buyer transfers money, you transfer the deed, many legal documents are signed, end. In the perfect world, the buyer and seller walk away happy.
The cash in your pocket equates to the sales price of the House minus any money that was owed to lenders or anyone else. Add closing the title company will pay off the banks and then transfer the proceeds to you.
The service the title company provides of arranging and paying off the loan is a closing cost – one of the many. The loan that is paid off is not considered a closing cost.
Closing costs are incurred when a person or company provides enable you to sell your house. These fees are associated with services that are provided by the title company, real estate agents, bank fees, legal and lawyer fees and more.
So, do you have to pay them?
Someone absolutely must pay them. These are fees for services that are rendered. It is possible to have the buyer pay all the closing costs however this is not very common. The party responsible for the closing’s fees are defined in the purchase agreement, i.e., the original offer the successful buyer put on your house.
This is What Closing Cost Are in Colorado.
So just how much are closing costs in Colorado you ask?
Have you ever heard the saying location, location, location? This row seems to ring true in all real estate avenues. And closing costs certainly vary by location. Some of the reasons that closing costs vary by location are:
- Local transfer taxes – individual HOA’s, cities or states can have transfer fees that must be paid.
- The house location will dictate how much your home sells for – and closing costs, certainly realtor commissions, are calculated on the sales price.
- The bank used for lending as different banks charge different fees when you buy and sell a house.
Second, sellers are both responsible for the closing costs. Historically, the seller typically pays the agent commissions and therefore will end up paying a larger dollar amount to close. Remember realtor fees are typically 6% of the sales price.
And don’t forget that besides the realtor fees, the seller will also incur closing costs that add up to 1 to 3% of the entire sales price.
The buyer will end up paying roughly 3 to 5% of the sales price to close on the house.
USEFUL Resources on Colorado Property Taxes
Estimate how much it will cost to sell your Colorado home
So that you are not caught unawares, I suggest that you try and work out how much it will cost to sell your house, and you can do this quite easily online.
First you need to understand what your house is going to sell for. How you work out what your house is worth is running comps. After you have run comps, multiply that number by 1 to 3% depending on your location.
To increase the accuracy, do some research into what your local transfer fees are.
Currently, the mean price of a house in Colorado is over $600,000. Using this number, the seller should expect to pay anywhere from $6,000 to $18,000.
To remind you this dollar amount goes to the services you need to sell the house, except the realtor commissions. Understanding all the closing costs will save you a nasty shock when you decide to sell. It can also help you understand what cash you will have leftover for your next move.
Colorado Closing Costs: What is included when you sell in Colorado?
And as the seller what do you have to pay for at the closing table?
Here’s a list of some of the more common closing costs so you can understand what you’re going to have to pay for. The closing costs are generally split between the buyer and seller in Colorado. In fact, this is typical across the entire country.
The party that must pay for each item generally follows the status quo. By that I mean it is typical for sellers to pay for the real estate Commission and the title insurance. however, there is no law as to who is responsible for the closing costs. The party that pays for each item is determined in the purchase agreement. Nothing is hard and fast and can be part of the negotiation.
So here are some typical closing costs You may have to pay for.
Title search: $250-$600
The title search shows who is the legal owner of the property. It is important to know who this is because it is the legal owner who can sell it. Ideally, you are that person. The title search also checks if the property has any liens or judgments against it. Any of these must be cleared before the property can be sold.
Title insurance: $900 to $1500.
Title insurance protects the person that is buying their house in case There are any problems with the title in the future. For example, someone may come out of the woodwork and say that they are in fact the legal owner. If you just closed on the House, obviously you want to be sure that if something does arise you will be covered.
House Inspections and Home Inspections: $300-$700
The cost to get a home inspection can vary wildly. A more expensive inspector doesn’t always mean better. A home inspection will reveal any problems with the property. It can identify anything that needs to be fixed. After the home is inspected, the professional will create a report and present that to the buyer. The buyer will then look at the home inspection to determine what they want to be repaired before closing on the house.
The repairs that are identified bun from the inspection are not considered closing costs. However, if the buyer requests you fix items on the report, they will become costs you must incur as the seller for it to be able to sell the property.
In my experience, the home inspection is paid for by the buyer.
Home Appraisal to determine what the house is worth: $400-$800
The home Appraisal is a closing cost that a bank will require. The lender will require an independent appraiser to come in to determine what the home is worth. They will compare this with the contracted sales price. If the house is valued a lot less than what you are selling it for, then the closing may not occur. Or the bank may require the buyer to bring extra cash to the closing.
The reason the bank wants an appraisal done is in case the person that is buying their property is unable to pay the mortgage in the future. Ideally, the lender would renegotiate the terms of the loan to stop foreclosure. However, if this can’t be done, the property will be sold at auction. When the house is sold at auction. The lender needs to know they will be able to get their cashback from the sale of the property.
Loan Payoffs and Mortgage Payoffs: To be determined
When you sell your house, you must sell it with a deed that is unencumbered. Another term is a marketable deed. A very common encumbrance on a deed is a mortgage that the current owner used to purchase the property. When you sell the house, this mortgage must be paid off in full.
The amount that this will cost the seller is the amount that is left on the mortgage. There may be other fees associated, such as a prepayment penalty. Prepayment penalties are not very common. Closing costs. Most lenders today will give you a loan without a prepayment penalty.
Other fees involved with taking out the mortgage on the buyer’s side can include but is not limited to the application fee, origination fee, and perhaps even having to prepay for interest or the first mortgage payment upfront.
HOA, Town, or City Transfer Taxes: Varies by location.
Transfer taxes are a fee that is charged to transfer the ownership from the seller to the buyer. Transfer taxes can be set by several different bodies. And HOA may have a transfer tax that requires payment at closing. Likewise, a city may impart a closing cost that is also a transfer tax.
Second, these are also closing costs that must be paid. The transfer tax can be paid by either the buyer or the seller. Once again, it is the contract to purchase the House that determines who pays for what.
Legal Documents and Attorney Fees: $150 to $1500
How much are attorney fees when I sell a house in Colorado?
Legal documents and attorney fees that are involved with closing on a house typically run in the low one hundreds. However, if the sale is a complicated process a lawyer may be required to draft more documents. If this is the case, the legal fees will increase significantly.
When it comes to legal fees and attorney costs, working with a professional buyer to sell two can be most beneficial. This is because they’re so used to the process they can. Get the house sold without incurring any extra costs for you.
For a professional buyer, the process of buying a house and moving it through closing is very simple. Any legitimate cash for houses company would be able to close on any house as quickly as you need and would cover any normal legal fees during the closing process.
Regardless, if you sell your house the traditional way, or if you sell for cash, it is very important you understand all the documents you are signing at closing. Remember, selling your house can be the largest financial transaction you will ever make, so you want to avoid any costly mistakes. It certainly never hurts to have a second set of eyes to ensure everything is handled in the right manner.
Property Survey Closing Cost: $300-$600
Do I need a property survey to close on my house in Colorado?
A property survey is only required in Colorado if the buyer is using a mortgage or loan to purchase the property.
So, what exactly is a property survey?
A property survey is when an engineering company will check the boundaries of the land your soon-to-be-sold house is sitting on. The property survey defines what land belongs to the house and what does not.
It is possible to avoid this closing cost if you sell your house to a buyer that is using cash funds to close on the house.
Recording Fees to Close:
What are the recording fees for closing in Colorado?
In Colorado, there is a small transfer recording fee of $6 for the first page, and for every page after that is $5. Normally the deed is only one page. This would cost you $6. Loan documents can range anywhere from one page to 100. For every one of these pages, it would cost you $5. Therefore, the recording fees That are incurred during closing can vary.
Buyers credit report: $15-$60
A buyer’s credit report will be required if the buyer is getting a loan.
A credit report is another closing cost that is charged when the person buying the house is taking out a loan. The credit report will give the buyer a credit score, which is a determining factor in whether the purchaser is eligible for the loan.
Bills, Liens, Money that is owed for Services at the Property: Varies tremendously
If I have an outstanding bill on my house, do I need to pay this at closing?
Did you incur a fine from the city for trash in the alley behind your house? At closing, this must be paid. Maybe the city fined you for long grass. Another closing cost that must be taken care of. Outstanding water bills, or other utilities, or maybe a mechanics lien from when an electrician came over are all items that will need to be paid and are part of the closing costs in Colorado.
Other places these costs could come from are insurance, HOA’s, local organizations, or the state.
Other costs, fees and charges when selling a house in Colorado
Are there costs outside of closing costs that I need to consider when selling my Colorado Home?
Renovations and repairs – Just to get it ready to sell.
Closing costs aren’t the only. Costs that you will incur when you sell a house In the Centennial state (Colorado). In fact. When you look at what it costs to sell a house, closing costs are just a small part of the total.
Before you even listed the property, you may need to make repairs or renovate it so that it is competitive with other homes that have sold in your neighborhood. Renovations. Can easily run into the thousands and 10s of thousands of dollars.
According to HomeAdvisor, on average, a kitchen remodels costs $25,588 with most owners spending at least $13,360. Can you imagine spending that amount of money and you haven’t even listed your house yet!
Talk about the high cost to close a house sale!
AND that’s just the kitchen!
Staging the house for showings
Staging is a cost you will want to pay when listing it on the MLS however it is not a closing cost. Let’s call it a cost you must incur to get an offer on your house to get it to the closing table.
While it’s not mandated, good staging can help you sell your house. It can help you sell your house faster. It may also help you to get better offers and therefore a better sales price.
Hand in hand with staging is professional photography.
When selling your house using a realtor, the listing will be broadcast to the masses online. When potential buyers look at your house, they will spend roughly 3 seconds deciding if they want to give you an offer.
How do they make this choice?
BY THE PHOTOS THEY SEE ON THE LISTING!
If you have great photos, you are much more likely to be successful in selling your house. The best real estate photographers will be able to capture your house in a way that invites people to come and look.
Are real estate agent commissions a closing cost?
Realtor fees and commissions are not a closing cost however if you sell your house in the traditional way you will have to pay for a realtor. Most commonly, agents’ fees are based on the sales price. They will charge you a percentage of what the property sells for.
If your house sells for $600,000, which is slightly less than the average price of a house being sold in Denver, Colorado, you should expect to pay the realtors $30,000.
$30,000 is a huge sum of money. Now I am not here to argue about whether real estate agents are worth it. If you are not a real estate professional, then using an agent is probably a good idea if you want to sell it on the MLS.
A realtor will tell you what you should list it for. They will put the listing online for you and they will arrange the showings.
That said you are the one that has the hassles of dealing with people walking through your house at any old time. You are the one that must clean the house, make sure it is spotless, every time a potential buyer comes through.
Who pays for the Closing costs in Colorado?
If I am selling my house, can I have the buyer pay for everything?
Legally you can have the buyer pay for all the closing costs. However, this almost never happens.
Here in Colorado, the closing costs are normally split in a very typical fashion between the buyer and the seller.
For example, almost every time a house is sold the seller is expected to pay:
Mortgage payoff and prepayment penalty
- Title insurance
- Outstanding bills
- Seller’s attorney fees
- Recording fees
- Typical Buyer Closing Costs
On the buyer’s side, there are a larger number of closing costs. However, if you include realtor commissions as a closing cost the total dollar value is much less. Remember selling the average single-family home in Denver using a realtor will cost you $30,000 in commissions!
Typical costs for the buyer include:
- Title search
- Credit report
- Loan fees
- Title insurance
- Home inspection fee
- Home appraisal fee
- Buyer’s attorney fees
- Survey fee
No, remember there are no laws that say that the seller must pay for this at closing and the buyer that. Who pays for what is determined in the original offer on the house?
The offer to buy the house will include language that defines who will be paying for what. The buyer is allowed to make any changes they want to this contract before the seller has signed it. Therefore, the buyer could give you a written offer that includes language that states that you, the seller, must pay all of them!
Now as the seller you don’t have to agree to this. AND I don’t know any seller that would!
AND in a “sellers” market you would probably find that the buyers must pay for more of the costs. Paying for extra closing costs or waving and inspection would make the offer look more appealing. A more appealing offer is mor likely to be accepted by the seller. So, to bid successfully on a house the buyer must consider more than just the sales price.
Buyers can make the sale so much easier if they are willing to do more of the work.
So, to summarize this, during the negotiation phase, i.e., before the purchase agreement is signed, buyers and sellers can come to an agreement about who pays what. This is perfectly legitimate.
Of course, you just need to know what you are doing.
Selling a house can be very complicated if you are not in the business. This is why selling a house is considered to be one of the most stressful events someone will ever encounter!
If only there was a better way to sell your house.
Is there a way to sell my house and avoid all the closing costs?
Yes! This is how to sell your house in Colorado and not pay any closing costs!
You can sell your Colorado home and avoid all the closing costs. AND this is how you can do this.
Sell your house to a professional and legitimate real estate investor. Real estate investors that buy your house and help you avoid closing costs are also known as cash home buyers, cash for houses companies, or we buy houses companies.
Watson Buys purchases real estate in Denver CO in any location across the front range and in any condition so do not hesitate to contact us for your best cash offer today!
Cash for houses companies specializes in buying houses for cash. Legitimate companies will have a transparent process that eliminates the need many of the unnecessary costs such as:
- Cash home buyers do not use realtors and will buy your house without an agent. You won’t need an agent either so straight away you can save $30,000 on the sale of your house! So, if you need to know how to sell your house without a realtor start off by talking to a trusted cash home buyer. Watson Buys is a trusted buyer that will buy your house without you having to use an agent. We buy direct from you to save you on those massive commissions. No commissions mean more cash in your pocket!
- Professional buyers will pay cash for your house (cash for houses) and therefore will not be using a bank for a loan. NO Banks means NO banks fees. Another benefit to eliminating banks is the associated red tape and delays are no more too! The means you can sell your house faster when you sell for cash.
- We buy houses companies are paying cash, so a property survey is not required. Remember a property survey is only required in Colorado if a mortgage or loan is involved. You’re selling your house fast for cash so that closing cost is also no more!
- When you sell your house for cash the best companies will do all the work for you. Because they do all the work things will go smooth. You will sell your house fast. You will sell your house fast and pay no closing costs! Selling your house will be easy!
SUMMARY: So how much are closing costs in Colorado when you sell a house?
They are a lot! AND…closing costs in Colorado are inevitable and must be paid when selling with a realtor. This is no way around it – when you need to sell your house in Colorado you will pay closings costs if you sell with an agent.