If you’re selling a home in North Carolina, you’re likely wondering how much you’ll pay in closing costs at the end of the sale. Nationally, closing costs for sellers average anywhere from 6% to 10% of the total sale price. According to Bankrate, the average total closing cost for home sales in North Carolina was about $3,406.
However, these figures are only averages. For an accurate estimate of what you’ll owe after you’ve sold your home, you need to dig into the details. With help from a top local real estate agent, we’ll help detail North Carolina seller closing costs so you can tally up your home sale fees.
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North Carolina sellers are on the hook for these closing costs
Some closing costs are dependent on the specific circumstances of the sale. However, North Carolina sellers can almost always expect to pay the following expenses:
Mortgage payoff
If you’re one of many North Carolina residents who have a mortgage, you’ll need to pay the amount you owe while finalizing your home sale.
Ideally, your home sale should cover your outstanding mortgage and closing costs. Currently, the short housing supply due to high lumber costs and a nationally booming real estate market has resulted in a 54.54% percent increase in the average North Carolina home price during the last five years. This appreciation means that if you’ve owned your home for several years and have built substantial equity, you may be able to sell it for more than your outstanding mortgage — pocketing some profit after you’ve covered closing costs.
Property taxes
In North Carolina, real property taxes (or “ad valorem” taxes) are charged by counties and municipalities.
By state law, property taxes are prorated to the day of closing, meaning that sellers only need to pay taxes for the amount of time they owned the property during the year. Because these taxes are under the authority of local governments, the cost can vary depending on where you live. To find out about your local property tax rates, see this page from the North Carolina Department of Revenue.
In some real estate transactions, sellers and buyers negotiate over how much each party will pay in property taxes. However, Autumn Dubois, a top-selling agent in Raleigh, points out:
“Generally speaking, property taxes are not something that comes highly into the discussion … Property taxes are really reasonable in North Carolina. We get a lot of people who move in from out of state, and our taxes are negligible compared to where they came from.”
Transfer tax
The state of North Carolina also charges a transfer or excise tax, a one-time fee home sellers pay at the date of closing. According to article 8E of the state’s enacted legislation statutes, the excise tax rate is $1 for every $500 of your property’s value, or 0.2% of the total value of your home.
Additionally, some counties, including Dare County and Perquimans County, charge an additional land transfer tax of up to 1% of your property’s value.
Real estate agent commissions
Typically, the most expensive closing cost North Carolina sellers pay for is agent commission. Like most places in the country, sellers in the Tar Heel State customarily pay the commission for both their agent and the buyer’s agent. Nationally, real estate agent commissions usually cost sellers about 3%-5.8% of their home’s value.
While it is possible for homeowners to sell their homes without an agent, “For Sale by Owner” sellers typically allocate the money saved on commissions to marketing, home staging, Multiple Listing Service (MLS) access, and other services normally included in an agent’s commission.
Furthermore, according to our research, the top 5% of real estate agents in the United States sell homes for up to 10% more than their peers, meaning that an excellent agent will likely net you more money on your home sale even after charging a commission.
To connect with top-performing agents in your area, plug your home details into HomeLight’s Agent Finder. We’ll match you with the three best agents for your unique home sale.
These closing costs may apply to North Carolina sellers
Some costs are dependent on the specific circumstances of your home sale. In North Carolina, these are the most common additional closing costs that sellers pay:
Attorney fees
The North Carolina State Bar requires a licensed attorney to handle residential real estate closings. Dubois tells us that the required attorney is the buyer’s representative so the buyer typically covers this fee. Additionally, Dubois pointed out that the buyer’s attorney handles escrow in North Carolina, meaning that buyers tend to cover escrow fees, as well.
Still, Dubois advises her clients to pay the necessary $150 to $300 to hire their own attorney:
“We actually recommend a separate attorney prepare seller documentation, mainly so that the seller can have their own representation and ask questions if something comes up throughout the transaction. If the seller wants exclusive legal representation, that’s truly the only way to do it.”
Outstanding debt secured by your property
In some cases, homeowners use their property as collateral for a loan or other form of debt. By doing so, they can take a loan on their property, or another party can put a lien on the home for an unpaid debt. To sell a home, it must have a “clear title,” meaning that there are no outstanding debts associated with the property.
If you have any liens on your property, you’ll need to settle your debts before you can transfer your property to the buyer, as well as pay off any overdue taxes outstanding from previous years.
If there are any outstanding debts on your property you aren’t aware of, they’ll surface when the buyer’s attorney conducts a title search.
HOA fees
About 38.8% of North Carolina homeowners belong to a homeowners association (HOA), and there are 14,900 separate HOAs across the state. These groups charge homeowners a fee every month, and these fees can range anywhere from $50 to $700 per month. As with property taxes, these fees are prorated to the day of closing, so you’ll owe HOA fees for the portion of the year you owned the home at closing.
Termite inspection
According to the North Carolina Department of Agriculture and Consumer Services, nearly all residential properties require a termite inspection before the property can be sold. The seller customarily hires and pays for a licensed pest control operator to conduct the inspection. The average cost of a termite inspection in most North Carolina cities is around $75-$175.
Want to get an idea of your profit post-closing costs? Here’s how to get an estimate
Taking all of the above closing costs into account can make your head spin. For a quick and easy ballpark estimate of your closing costs and net sale proceeds, check out HomeLight’s Net Proceeds Calculator. Our tool takes into account your home’s location, value, outstanding mortgage amount, and other relevant details to provide you with an estimate of how much money you’ll net on your sale.
If you move forward with a home sale, you’ll know exactly what you owe in closing costs when you receive your closing statement. A closing statement is an itemized list of all the financial aspects of your home sale provided at the end of the closing process. If you’re like most sellers in North Carolina, the final tally of closing costs will land between 6% to 10% of your home’s sale price.
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