These 3 Costs Caught Me By Surprise in My Recent Home Sale

Recently, I sold my home. My goal is to buy a new property. But I had to sell my old one first so I could use the proceeds for a down payment to qualify for a mortgage loan. 

I was able to sell the house for a good price, and the property sold quickly so I was pretty happy. But, although I ended up walking away with the money I wanted from the sale, I also incurred some added closing costs that I wasn't expecting.

In particular, there were three surprise costs I had to pay upon the sale of my house. 

1. Transfer fees to the HOA

One of the costs I did not expect was a transfer fee paid to my homeowners association. Basically, my HOA charged me $400 to transfer the account to the new owner of the property. This fee is apparently a common one charged by associations because of the paperwork involved in switching the account to a new owner. But, since I have never owned a house in an HOA neighborhood before, I wasn't aware of it. 

Since the HOA also had to prepare a report about the current state of the account, I also had to pay a fee for an estoppel letter from them. This cost me another $200. So, I basically ended up paying $600 to my HOA just for the privilege of being able to sell my house. If you plan on selling your home soon and live in an HOA, check to see if there is a transfer fee and how much it is so you're prepared. 

2. Stamp taxes

When I reviewed my closing cost statement, I was also surprised to find something called a "Documentary Stamp Tax," on it. This, apparently, is a tax the state Department of Revenue charges when interest in real property is transferred. In the state where I was selling my property, the tax comes at a cost of $0.70 per $100 or part thereof of the amount the buyer pays.  

While that may not seem like a big fee, it added up to quite a lot of money in my case -- and in most situations, since properties usually cost hundreds of thousands of dollars. I had no choice but to pay this amount out of my bank account since the local government requires it, but it was a big added expense that I wasn't aware I was going to incur as a seller. 

3. Notary fees

Finally, we needed to do a remote closing on the home, because we were out of town at the time the sale went through. This meant we needed a notary to witness the signing of the documents. We ended up having to pay a $125 fee to the notary to take care of this part of the home sale process for us. 

While none of these fees were ridiculously expensive by themselves, they did add up and they reduced the profits I was able to walk away with when my home sold. I was not prepared for them, but fortunately I had sold for enough money that we were easily able to cover them with the proceeds so it didn't turn into a crisis. Anyone who is selling a house needs to be prepared for this kind of unexpected cost, though, as there may be many unpleasant surprises during the closing process.