Understanding closing costs is essential for a smooth transaction when selling your home in Louisiana. Closing costs refer to the various fees and expenses that sellers and buyers incur when finalizing a real estate deal. These costs can include everything from the loan payoff amount to property taxes and agent commissions.
In Louisiana, closing costs can vary depending on the specifics of your sale, making it important to know what to expect.
Whether you’re a first-time seller or experienced in real estate transactions, knowing the details of these costs can help you plan better and avoid surprises as you close the sale of your property.
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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 are the fees that arise when finalizing a property transaction. These costs can include a variety of charges, such as property taxes and insurance, which are typical for most homeowners and sellers. However, certain fees, like transfer taxes, may differ depending on the location of your property at the time of sale.
Mortgage/Loan payoff amount
The loan payoff amount is the remaining balance that a homeowner must settle before they can complete the sale of their home. This amount typically includes the outstanding principal balance on the mortgage as well as any accrued interest over the course of the loan. Additionally, it may incorporate other fees required to fully close out the loan.
Before selling your home, ensuring that the loan payoff amount is fully paid is an important final step in transferring clear ownership to the buyer.
Property taxes
According to WalletHub, Louisiana ranks 6th in the country in terms of property taxes, placing it above states like Arizona, but tied with states like Delaware and Utah.
Real estate in Louisiana is taxed at a rate of 0.55%, with a median home value of $252,000. 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.
Louisiana is one of the few states that does not have a transfer tax, although you will still be responsible for other closing costs.
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.
Louisiana requires a licensed attorney when selling property, according to Louisiana Law R.S. 22:512(17), which requires a licensed attorney to examine and certify the title.
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.
Seller’s concessions
Sellers in Louisiana might find themselves responsible for certain costs at closing due to financing concessions negotiated during the sale process. These concessions can include contributions toward closing costs, repairs, or even providing a home warranty for the buyer.
A typical seller concession is repair credits, which can be offered when a buyer has a contingency related to a home inspection. In such cases, if the seller opts not to address the repairs identified by the home inspector, the buyer may withdraw their offer without losing their earnest money.
Instead of making the repairs, sellers can choose to offer repair credits at closing, giving the buyer cash to cover the necessary work. However, these concessions are less common in a strong seller’s market, where contingencies might deter potential buyers.
Miscellaneous closing costs/fees
These are some of the most typical closing costs you’ll face as a seller in Louisiana. However, it’s important to remember that many of these costs are negotiable. Your buyer might be open to negotiating some of these expenses, and a real estate agent or attorney can assist you in securing a better deal.
HomeLight can connect you with a top local agent to help minimize your closing costs without risking your sale. Alternatively, if you’d prefer to skip the complexities of working with an agent and managing closing costs, consider HomeLight’s Simple Sale program. We make selling your home straightforward in just three steps—provide some basic details about your property, consult with one of our Home Consultants, and you could sell your home in as few as 10 days.
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