Seller Closing Costs in Virginia

What Are Virginia’s Seller Closing Costs?

If you are thinking about the possibility of selling your home, whether it is a month from now or a year down the road, there are two numbers that every seller needs to focus on.

Maybe you have been mentally turning these numbers over in your head for some time. Or maybe you went right in for the answer.

Either way, I am glad that you are here.

If you have more questions about selling, see our full guide on selling a home here.

The first number is “what is my home worth”. This is a good question. But likely more important is the question about the number that comes next. “How much will I walk away with when I sell?”

If you live in Virginia, I wrote this article to help you answer the question of how much you will actually profit when selling.

There are a lot of quick calculators out there to estimate your closing costs if you are the seller of a home in Virginia. Some of them are quite useful. Some are dated and inaccurate.

My goal here is to give you a more thorough look into what is behind the numbers, so when you do go to the closing table you can know what is going on.

I am a real estate expert and agent in Northern VA. I have helped sellers for nearly a decade navigate real estate transactions.

Each section is an explanation of items that may (and some that definitely will) be closing costs for you if you are selling a home in Virginia.

Seller Subsidy to Buyer

Buyers have closing costs as well as sellers. In addition to the down payment for their loan, they often will pay another 2-3% of the sales price in other costs.

Because of this, it is not uncommon for the buyer to request that you give them a credit at settlement to help cover their closing costs.

This is also known as a seller subsidy on a Virginia sales contract.

Now, this is negotiable and does not happen in every situation. For example, if you get multiple offers on your home then the offer you select often will not have a request to cover any closing costs.

Giving the buyer a credit does not mean they are pulling one over on you.

For a buyer that wants to preserve cash, sometimes they are more willing to give you a higher contract sales price for your house but want (or need) the seller’s help toward closing costs.

If you do end up giving the buyer a credit to get the deal done, you will see this amount in the contract before it is ratified (all parties sign).

Taxes

Taxes are one of those unavoidable facts of life. Real estate taxes are similar, as you are assessed taxes for buying, selling and owning real estate.

There are two type of taxes to look out for when you get your settlement statement in Virginia. Property taxes and grantor taxes.

Property Taxes

Your property tax bill is, in most jurisdictions, due twice per year.

Property taxes are paid in arrears in most counties, which means that you pay after to cover the time you have already lived there.

So if you close on your home on May 1, you will owe about 4 months of property taxes that have not been paid yet. The new buyer will pay the remaining 2 months when the bill for the previous 6 months arrives.

So at closing, most commonly you will actually technically give the buyer a credit of those 4 months of property taxes, so that they can then pay the full 6 months when the bill arrives.

So you, indirectly with a credit to the buyer, will pay the outstanding property taxes that you owe at closing. How much you will have to pay for this tax depends on when you sell the house relative to the last payment you sent in.

Grantor Taxes

Grantor’s taxes are a closing cost connected to the sale, and as a seller you will find them down farther on the settlement sheet than the property tax in most Virginia closings.

The grantor’s taxes include State and Local Deed Tax, also known as the Deed Stamp Tax. This is triggered every time there is a transfer of ownership.

In addition, there is a tax called the WMATA tax that goes toward public transportation.

This was formerly called the “Congestion Relief Fee”. However was later changed. The only relief it gave was some comic relief for anyone who has driven on 495 in rush hour.

These two taxes have changed in amount over time and by jusrisdiction.

However, combined grantors taxes have hovered around .25% of the sales price. So if you sell a home for $700,000 that will cost you about $1,750 in Grantors Taxes.

Title Fees

When selling a home in Virginia, you will have a title attorney or a title company handling the legal details of getting the transaction formalized, recorded and funds disbursed.

You will have to pay the title company as part of your closing costs as well. How they are presented vary, but most have a settlement fee and/or a deed preparation fee to charge to the seller.

There are also sometimes sometimes some various other fees such as a courier fee, archive fee, release tracking fee, etc.

These vary by company, but $700-$1100 is about the average closing costs for title fees for you as the seller in Virginia.

The buyer historically legally chooses the settlement company in Virginia, but many times the seller can choose to do their side of the settlement with a company of their choice with both sides agreeing.

The title company will coordinate with all the necessary parties to gather the rest of your closings costs and they are most commonly paid off out of your proceeds at closing.

Real Estate Commissions

Real estate commissions are paid to real estate professionals, usually at closing, for helping you navigate the successful sale of your house.

These fees are negotiable, there is no standard fee to pay for commission to hire your agent.

The listing agreement you sign before putting your home on the market will spell out how much you pay for your agent.

The agreement will also state whether and how much you will offer to the agent that sells your house.

Often, the total commission you pay will be split evenly between the listing agent and buyer’s agent but this is not always the case. The split will also be in your listing agreement.

The buyer and their agent will likely (or should) have an agreement in place spelling out how much their agent will get paid.

If the amount the seller offers to the agent who sells the home does not cover the amount the buyer has agreed to pay in their agreement, then the buyer will likely have to cover the difference.

A talented listing agent with lots of experience and an aggressive digital marketing approach to selling your house is worth paying this closing cost, and will show up in how much you are able to sell for.

Some agents may also charge an admin fee, so make sure you ask about that.

Homeowners/Condo Association Fees

If you are living in a home or condo that has an association, this will also be part of your closing costs.

Costs include unpaid monthly dues, the cost to order the resale package and occasionally they have an admin fee of some kind.

Monthly Dues

If you settle before you pay your dues for the month you will have to settle up at closing.

If you have any unpaid dues or unpaid fines associated with your account, these will be collected as well.

Resale Package

Virginia law states that the seller should provide the buyer with what is known as a resale package from the homeowner or condo association if there is one.

This needs to be provided during the contract period with your buyer, and you can defer the payment to the settlement table.

Mortgage Payoff

If you have a mortgage, this will also need to be paid off. I would not technically not call this a “closing cost” since it is an existing loan payoff and not an extra fee or cost of selling.

But it is something we will cover, since see it on that settlement sheet when you are sitting around the closing table.

The title company is responsible for ordering the payoff amount.

Mortgage(s)

The balance of your existing mortgage that the house you are selling was collateral for will be shown based on the payoff.

If you make a payment right before settlement, you can ask the title company to order a new payoff, and if it is not updated follow up with your lender about getting some funds back, usually they can do this post settlement.

If there is more than one mortgage secured by the house, you will see two line items on the closing statement.

Home Equity Lines of Credit

This is similar to a credit card, but uses the equity in your home. If you have an open line of credit with a balance, this will also be addressed when you sell.

Escrow Account Refunds

You may have been paying your property taxes directly to the county or city where you live.

Same goes for home insurance, you could pay a company directly for insurance.

But it also common that you pay your insurance and taxes through an escrow account that your lender has been holding for you.

After settlement, if there is a balance in these escrow accounts then you can reach out to your lender to get a reimbursement (though they should send the refund automatically).

Pest Inspection/Treatment

If your contract has a wood destroying insect inspection, it will specify whether you are paying for it or the buyer.

Occasionally, this inspection will turn up termites (popular especially in older homes) or other wood destroying pests.

In most home sale contracts, treatment is paid for by the seller.

You can use any company you want for treatment, but needs to be done prior to settlement with an additional report on what was treated.

There may also be damage identified in the report. If there is, the seller often must repair the damage or have a structural expert sign off on its safety.

Both the inspection fee and the treatment fee are routinely charged to settlement in Virginia, making it part of your closings costs.

Home Warranty

A home warranty can be included in the contract as well. The buyer may pay for the warranty, but it is also common for the seller to cover the cost.

Home warranties cover the appliances, major systems, etc. for a year after closing.

Contractors

Contractors and selling a house are obviously linked. From fixing up your home before it goes on the market to home inspection punch lists.

Contractors commonly are paid upon completion of their work. Sometimes, there is a deposit upfront and remainder due when they are done.

However, there are sometimes arrangements where a contractor will get paid out of your proceeds at settlement.

Renovating to Pay at Closing

Many sellers would like to renovate their home before listing it so they can get top dollar from the market.

Problem is, sometimes you do not have access to cash or credit to actually pay for those repairs. This may drive some sellers to sell “as-is” a dated or home in poor condition.

More and more, companies and individual contractors are offering to renovate and make repairs on a property and you can pay them at closing.

In this case you will sign a contract with the company before the work begins. The contract will stipulate that payment will be taken at settlement.

This can be a great option depending on your situation.

Mechanic’s Liens

A lien, or judgement, is essentially a claim against a portion of your property because of an unpaid service or other debt.

If you have a contractor that did not get paid for previous work on the property, they have the option to file a lien against your property.

If there are any of these such liens, known as mechanics liens, the specifics will be revealed during the title search and added to the settlement statement.

Other Judgements and Liens

In addition to a mechanics lien, a title search will also reveal any other judgements against the property or liens.

This can include several possible liabilities. Unpaid taxes, unpaid medical bills in collections and unpaid homeowner association fees are just a few of the possibilities.

Finding a Seller Closing Costs Calculator In Virginia

One good way to figure out a rough estimate of your closing costs as is to find a calculator that is updated with current Virginia rates for seller taxes, etc.

The best calculators do the following:

• Are updated yearly with any tax rate and recording fee changes.

• Have options for different counties/cities, as each sets their own tax rate.

• Customizable to add additional fields.

We have found that there good local title companies that have the best calculators.

Champion Title has a good net sheet for seller closing costs in Northern Virginia.

More Resources for Selling a House

• If you are looking to sell a home in Northern VA, fill out our home value estimate request form.

• Here is some advice on where to focus when preparing your home for sale.

• Some tips on interviewing a Realtor by Bill Gassett.

What is Next?

If you are in Virginia and looking to sell your house, lets talk. We have a stellar track record and can help you get the most profit the market will allow.

Have any questions about home selling? More questions about closing costs? Reach out to us and we can help.