If you’re selling a home in Connecticut, you should familiarize yourself with closing costs that sellers pay to finalize the transaction.
The average closing costs for home sellers fall between 6% to 10% of the home’s sale price. For example, a seller’s closing costs for a median sale price of $430,000 would range between $25,800 and $43,000, depending on various sale factors.
For an accurate projection of what you’ll pay for closing costs in Connecticut, it’s necessary to dig a little deeper into the details. To help you estimate your closing costs in the Constitution State, we created this comprehensive guide with help from a top Connecticut real estate agent.
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Connecticut sellers can count on these costs
Some closing costs apply to nearly every home sale. Here’s what home sellers in Connecticut customarily pay:
1. Mortgage payoff
About 66% of the 1.4 million households in Connecticut are owner-occupied, and 61.5% of those homes have outstanding mortgage debt. This means that most Connecticut home sellers need to pay their remaining mortgage balance before transferring the property title to a buyer.
Typically, sellers use their home sale proceeds to cover their mortgage payoff as well as other closing costs. If you have substantial equity, you can even walk away from your sale with a significant profit.
2. Loan reconveyance fee
When you pay off your mortgage, the lender will usually charge an administrative fee to handle documents reflecting that they no longer have a claim on your property. In other words, a loan reconveyance fee is what you pay to have the mortgage company remove their lien on your home. Typically, this fee will run you about $50 – $65.
3. Recording fees
You also need to pay your county to record the reconveyance that you are now the outright owner of your property. In Bridgeport, Hartford, and Greenwich, for example, reconveyance recording costs $60 for the first page of the document, plus $5 for every additional page.
4. Property taxes
At closing, you’ll settle any outstanding property taxes, paying a prorated amount that reflects only the days of the year that you owned the property.
Kelley Colino, a Danbury, Connecticut, real estate agent with 21 years of experience and over 435 transactions under her belt, tells us that property tax due dates depend on your local government:
“Sometimes, a particular township might charge property taxes quarterly, sometimes twice a year. If you’ve made payments for the rest of the year, the buyer will reimburse you for everything you’ve already paid.”
On average, property taxes in Connecticut cost 1.96% of a property’s estimated value per year. However, the price is dependent on the mill rate of your local government. For a list of Connecticut mill rates, see here.
5. State and local transfer taxes
Colino advises that sellers are required to pay transfer taxes to both the state of Connecticut and their local government. Transfer taxes are one-time fees that governments charge to finalize a home sale. Typically, Connecticut homeowners pay an average of 1% to 2.75% of the sale price total in transfer taxes.
The state tax itself ranges from 0.75% to 2.25%, while municipal taxes can vary. All Connecticut counties, with the exceptions of Groton, Stamford, and Thomaston, impose a maximum of 0.25% transfer tax. In these three other counties, transfer tax can be as much as 0.5%.
6. Agent commissions
For sellers, agent commissions are the big-ticket item when it comes to closing costs. While sellers are customarily in charge of paying the listing agent fee, which is around 3%, some sellers in Connecticut may offer to pay the commission for both the listing agent and the buyer’s agent, typically costing around 5.8% of the sale price.
If you’re feeling dismayed at the cost of agent commissions, there’s good news. HomeLight’s research reveals that the top 5% of real estate agents sell properties for 10% higher prices than their peers, meaning that a stellar agent pays for their service and then some.
To find a great Connecticut real estate agent, all you need to do is plug your details into HomeLight’s Agent Finder. We’ll crunch transaction data like list-to-sale price ratio, average days on market, and client reviews to match you with three top-performing agents for your home sale.
7. Attorney fees
Connecticut requires an attorney to conduct real estate closings. While it’s possible to rely on the buyer’s attorney to take care of the legal requirements for closing, Colino stresses that “it’s strongly recommended for sellers to have their own attorney for things that come up in municipal searches or in title searches; you’ll want to have your own representation.”
Colino shares that Connecticut real estate attorneys typically charge a flat fee of around $1,000.
Connecticut sellers may run into these closing costs
Some closing costs are only applicable to certain home sales. Here are the main ones to look out for:
8. Concessions
During the negotiation phase of your home sale, the buyer may ask for concessions like assistance with closing costs or credit for necessary repairs. Colino advises that concessions are common in Connecticut despite the current seller’s market; sellers often pay around $5,000 in concessions.
9. HOA fees and condominium dues
There are 5,100 HOAs in Connecticut, and nearly 13% of homeowners across the state belong to one. If your home is part of an HOA, you’ll owe outstanding membership dues as part of your closing costs. As with property taxes, your HOA fees are typically prorated to the day of sale. If you’ve already paid for the month, the buyer can credit you for the days you did not own the property.
Colino estimates that Connecticut condominium dues run around $350 per month. HOA fees typically range from $300 to $400 per month.
10. Liens
As part of the home sale process, the buyer pays for a title search to ensure there are no legal issues with the property’s deed. In some cases, title searches reveal liens, or debts charged as a claim on your property. Liens can be incurred through unpaid taxes, solar leases, debt from contractors, and more, and you’ll need to pay them in order to complete your sale successfully.
Estimate your net proceeds after closing costs
In the final stages of closing a home sale transaction, you’ll receive a settlement statement, an itemized list of all of the costs you’re covering. At this point, you’ll know exactly what it’s going to cost to sell your home.
If you’d like to get an estimate of Connecticut closing costs before this phase, use HomeLight’s Net Proceeds Calculator. We’ll crunch your estimated closing costs and home preparation expenses to provide you with an estimate of what it will cost to sell your home. Our calculator also provides an estimate of your net proceeds so you can gauge how much you’ll profit from your sale.
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