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Who Pays Closing Costs When Selling a House in Wisconsin

A document listed “closing costs”.

Homeowners looking to get the most out of their property should understand all the details of the transaction and know how the process will go. Knowing who pays the closing costs can make buyers and sellers aware of the hidden fees that often creep up during the negotiation. 

Using a realtor, brokerage, or title company can provide you with advice during the listing. Professional real estate agents can help homeowners make the highest profit when selling a house in Wisconsin. 

If you need to take out a mortgage loan from a mortgage lender, choose a real estate agent, find title insurance, or avoid paying hefty property taxes, keep reading to learn the best time to sell a house in Wisconsin and everything that can come with it. 

What Are Closing Costs?

To start: what are closing costs, and who pays closing costs when selling a house? The amount a sale must pay in closing costs differs between states, but the average closing cost in Wisconsin comes to just over $3,221 for most house sellers. This number makes up between 1.07% and 1.61% of the overall sale price of a property.

If the average price of a house for sale in Wisconsin is between $100K and $300K, the total closing costs for this transaction will be between $2,141 and $4,831 after taxes. 

The most common closing costs for buyers include the following: 

  • Appraisal Fees
  • Origination Costs
  • Tax Fees
  • Property Taxes
  • Flood Certification in Some Geographical Regions
  • Application Fees
  • Title Insurance Policy
  • Homeowners Insurance
  • Homeowners Association, or HOA Fees
  • Credit Fees
  • Loan Discount Costs
  • Bank Fees 

 Buyers should speak with their lender or their real estate agent to figure out the precise number of what they will have to pay during the closing process. Although the fees vary by the lender and the bank, buyers can still prepare by putting aside money and choosing the most reputable partner to lessen the hidden costs of buying a home.

On the other hand, there are very common seller closing costs that people should be aware of before finalizing any deals. On average, closing costs make up around 9-10% of the total sale price of a home. The most common costs a seller pays include:

  • Commission 
  • Prorated Taxes
  • HOA Costs
  • Title Insurance Fees
  • Seller Fees 

In addition to paying these standard closing costs, sellers should be aware of the total profit they will make from the buyer before they seal the deal. Some people will take an offer before they know all the fees they will have to pay along with the final sale price. 

Whether you are a buyer or seller, you should prepare to deal with one or more of the following common closing costs during the process of selling a house.

Transfer Preparation

One of the most common fees is the transfer preparation, typically ranging between $150 and $200. In the state of Wisconsin, house sellers need to complete the Real Estate Transfer Return (RETR) to transfer the title of the property to the new owner after the title search is complete. 

Since sellers will also have to use an attorney or buyer’s agent to correctly prepare and organize the house deed, this will also increase the agency fees. 

Delivery or Wire Money Fee 

Another typical fee that inexperienced house sellers sometimes overlook in the closing cost analysis is the delivery or wire money fee that goes to paying off any unresolved loans during the closing. If you pay off a loan via delivery or wire, this will usually cost between $25 and $75 extra. 

Title Insurance

First-time sellers should prepare to pay the title insurance closing costs during the final steps of transferring their home to a new owner. 

Title fees may reach as high as 0.43% during the sale, ensuring that if any problems come up during or after the sale, they protect the buyer after the fact. In Wisconsin, sellers are the ones who usually pay the new owner’s title insurance. 

Transfer Tax

The average transfer tax during closing costs for a house in Wisconsin comes to around 0.30% for most transactions. It is law in Wisconsin that sellers should use transfer taxes for any sale that is above $1k. 

Property Taxes

Property taxes cover any sale during the tax year. House sellers will have to pay prorated property taxes for the current year in which they sell the house through the end of the tax year, which comes at around mid-December in most cases. 

Recording Fees

Although this is less than other closing costs, sellers and buyers should keep in mind the recording fees associated with transferring a house to new ownership. It costs $30 to the Register of Deeds when completing real estate transactions in Wisconsin. You may also need to pay for a notary or other legal professional.

Warranty

Sellers usually have to agree to a prepaid warranty for at least 1 year of a home warranty to guarantee the “soundness” of the new purchase to the buyer. This averages between $300 and $600, depending on the house’s current condition. 

Underwriting and Appraisal Fee

If you are selling your house, chances are you will have to pay the underwriting and appraisal fee to ensure that you are serious about selling the house and keeping it in good condition.

Home Appraisal

If you are selling a house, you usually have to pay for a home sale appraisal. This puts you in a good mindset with the buyer and convinces them that your property is in fair condition and can be on the market. If you do not pay for the home appraisal fee, the deal can come across as shady. 

Home Inspection

A home inspection is a vital part of the home appraisal process. If you’re looking to sell a home, we recommend using this home inspection checklist in Wisconsin

Make sure that you use a reputable company to inspect all parts of the house, like the interior and exterior, to show the buyer they are making an intelligent investment. You can sell a house fast in Appleton if you pay for a high-quality home inspection.

Credit Check

Running a credit check on a potential buyer can give homeowners an idea of how credible the person is. If they have high-interest rates or poor credit, they may not be able to pay for the full home value or receive an appropriate loan amount. You may have to pay credit report fees for these inspections or, if you go through a real estate agent, they may do it for you. 

A document listed “closing costs”.

How Much Do Sellers Pay in Closing Costs?

Sellers end up paying a hefty price in the closing costs when home selling in Wisconsin. The average amount of closing costs a house seller might pay can be as high as 0.9%, with the real estate agent commission fees coming to almost 0.6% of the total home sale price. Although the buyer pays closing fees, the seller costs are typically higher. 

What is the cost of selling real estate in Oshkosh? You can find out the average seller’s costs here and in other cities in Wisconsin by using this guide. We buy houses Green Bay potential homeowners are looking for and can help you sell your home quickly to get the most bang for your buck upfront. 

How To Reduce Closing Costs?

Here are a few ways that home sellers can save on their closing costs when listing a house in Wisconsin.

Use a Low-Commission Agent 

Finding a realtor that has a low commission rate is the easiest way to save money on the overall closing costs. Since some realtor fees can be as high as 6%, doing some research ahead of time to find an agent with closing costs between 1-2% can help you save hundreds in the long run. Or, better yet, you can find a seller’s agent with a flat rate price for the closing cost fee. 

Negotiate with the House Buyers 

You can save money in the overall closing costs by negotiating the buyer closing costs before shaking or agreeing on a total purchase price. Make sure you ask questions, negotiate the deal, and bargain before you finalize anything on the closing date. 

Match with High-Rated Listing Agents

The final trick a house seller can use to save money on their closing costs is to match with the highest-rated agents in your local area. By looking into the close-by agents ahead of time, you can save up to 40-50% on the costs. A good agent can also help you avoid the real estate attorney fees associated with title insurance and other legalities.

Conclusion 

If you are a house seller or future home buyer in Wisconsin, knowing what to expect during the closing process can help you save money in the long run. We recommend doing some research ahead of time to know the steps to take to save money and get the best deals. 

Some of the first things to do include reviewing the loan information, assessing the down payment, deterring lender funds, starting an escrow account, and calculating escrow fees. Once the basic steps are complete, you can begin calculating how much you may have to pay for this closing process. 

Although Wisconsin sellers usually have to pay as much as 3% of their final sale for their closing costs, you can reduce this number by using our tips and tricks.

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