Colorado Home Seller Fees

This insurance provides homebuyers and lenders with vital protection against losses from certain title issues including forgery, fraud, and liens – problems that might limit a homeowner’s use and enjoyment of their property.

Prorating an expense like property tax ensures that buyer and seller each pays a fair share. A fair share is the amount of money that applies to the amount of time the buyer owned the home during the year of the closing. For a July 1 closing, for example, each side will have owned the home for half the year, so each will pay half the cost of pro-rated items.

Since most homeowner associations collect monthly dues upfront (some HOAs bill quarterly or annually), if a seller has not yet paid the dues, the dues will be paid from the seller’s proceeds. The seller will receive a credit for the unused portion of dues.

For example, if the dues are $300 a month, the daily proration is $10. When a transaction closes on the 10th of the month, the seller will be charged 10 days of HOA dues or $100. The buyer will pay $200 for 20 days of HOA dues.

A transfer fee covers the cost to update ownership records maintained by the Association and the time and paperwork required by a buyer’s realtor, lender, title company, insurance agent, etc.

Final utility bills such as water/sewer will be requested by the title company so those can be paid at closing.

Commissions are 6 percent of the sales price and in most cases the commission is evenly split between the buyers’ agent and the listing agent.

The Loan payoff is the amount required by your lender to payoff whatever is still owed. This includes but is not limited to 1st, 2nd, or 3rd mortgages that have been taken out on the property.

There is a 2% withholding tax on the sales price of Colorado real estate on the amount in excess of $100,000 to sellers not residing in Colorado. The tax is withheld at the time of closing by the title insurance company. It is treated as an estimated payment to Colorado.