It is important to understand the full scope of closing costs when selling your home in Arkansas. These costs consist of various fees and expenses that sellers are responsible for at the final stage of a property sale.
Closing costs typically include charges for loan payoff, property taxes, and other essential services required to finalize the transaction.
In this guide, we’ll explore the specific closing costs you can expect to encounter when selling your property in Arkansas. We’ll break down each component so you know exactly what to anticipate, helping you prepare for a smoother sale process.
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Disclaimer: This article provides estimates of a seller’s closing costs that are meant for educational and research purposes only; our calculations are not a guarantee.
What are closing costs?
Closing costs refer to the various expenses that arise during the finalization of a property sale. These costs can cover a broad spectrum of fees, such as property taxes and insurance, which are generally standard for both buyers and sellers. However, some fees, like transfer taxes, may vary depending on your property’s location at the time of sale.
Mortgage/Loan payoff amount
When selling your home, it’s important to address the remaining balance on your mortgage. The loan payoff amount is the total sum required to fully pay off your mortgage.
This amount includes the outstanding principal balance and any interest that has accrued over the life of the loan. Additionally, there may be extra fees or charges associated with finalizing the loan terms, which are also included in the payoff amount.
Property taxes
According to WalletHub, Arkansas ranks 15th in the country in terms of property taxes, placing it above states like California.
To get a better idea of what you might owe, consult a property tax calculator.
Reconveyance fee
After completing the sale of your home and settling your mortgage, you’ll typically need to cover a reconveyance fee. This fee is associated with the issuance of a reconveyance deed, which officially releases you from your mortgage debt. The deed must be recorded by your mortgage company, and the cost of the reconveyance fee can vary depending on the specific requirements of your city, state, or county.
Realty transfer tax
You also might be responsible for what’s known as a realty transfer tax. These are fees assessed by local governments whenever a property changes ownership.
These taxes are sometimes called a “Deed Excise tax” or a “Documentary Stamp tax.” Who ultimately pays these taxes depends on the state, city, or county where the sale occurs.
In Arkansas, for example, the seller is typically responsible for covering transfer taxes as part of the closing costs. The tax rate is $3.30 per $1,000 of the amount the property is sold for, on transactions that exceed $100.
Real estate agent commission
Unless you’re selling your home for sale-by-owner, you’ll likely have used a local agent. Research indicates that an agent’s expertise can significantly impact your sale: In 2023, homes sold with an agent’s assistance had a median price of $405,000, compared to $310,000 for FSBO sellers.
Working with a real estate agent means paying a commission. This fee covers various services, such as accurately pricing your home, marketing it effectively, and negotiating with buyers to ensure you receive the best possible price and terms.
It should be noted, however, that on March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.
HomeLight’s transaction data reveals that the national average real estate agent commission is 5.8% of the property sales price. This commission typically includes fees for both the listing and buyer’s agents, with sellers customarily covering the cost.
Use HomeLight’s commission calculator by entering your city for commission data tailored to your specific area.
Attorney Fees
Some states require an attorney to be present when closing the sale of a property.
Real estate attorneys are not essential for closing in Arkansas, but your real estate agent may suggest one regardless.
Homeowners Association/Condo Fees
One of the biggest sticking points for sellers is the fees levied by their homeowners’ association (HOA) or condominium association fees.
Like other fees we’ve discussed, these will vary, not just because of the different rules and regulations of your local HOA but also because HOA regulations vary greatly depending on the state. These fees (or dues) are usually prorated at the time of the sale.
The average monthly HOA fee in Arkansas is $394.
Seller’s concessions
Sellers might find themselves responsible for certain costs at closing due to financing concessions agreed upon during negotiations. These concessions can cover a range of expenses, including cash for closing costs, repairs, and home warranties.
A typical concession from sellers is repair credits, often used when a buyer includes a contingency in their offer, typically related to the home inspection. If the seller chooses not to address the necessary repairs identified during the inspection, the buyer can back out of the deal while retaining their earnest money.
Instead of completing the repairs themselves, sellers may opt to offer repair credits—cash provided at closing to cover the cost of repairs. It’s important to note that these concessions are less common in a seller’s market, where contingencies might deter potential buyers.
Miscellaneous closing costs/fees
These are some of the most common closing costs you’ll encounter as a seller in Arkansas. However, it’s important to remember that many of these costs can be negotiated. Your buyer might be open to negotiating certain fees, or a real estate attorney or agent could assist you in securing a better deal.
HomeLight can connect you with a top local agent to help minimize your closing costs without compromising your sale.
Alternatively, if you prefer to skip the complexities of working with an agent or managing closing costs, consider HomeLight’s Simple Sale program. We make selling your home straightforward with just three steps.
Provide some basic information about your home, consult with one of our Home Consultants, and you could sell your home in as little as 10 days.
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