Selling a home in Delaware involves several Delaware seller closing costs that can affect the final amount a seller receives. From transfer taxes to agent commissions and settlement fees, understanding these costs is important before closing day. Many sellers also ask whether a cash buyer pays closing costs in Delaware, since cash deals often reduce loan-related fees and simplify the transaction process.
How Much Are Closing Costs in Delaware?
It is important to note that the amount spent on closing costs in a real estate transaction may vary depending on the property’s price and location. It is a well-known fact that closing costs in Delaware are higher than in other states. According to housing data, in Delaware, buyers and sellers spend around 5.4 percent of the total price on closing costs, in addition to the real estate agent commission.
To gain a better understanding, let’s consider a real-life situation involving a real estate agent in a property transaction. If the total price is around $355,100, which is near the median in mid-2024, then the total amount spent on closing costs is slightly above $19,000.
However, the figure may vary by location. For example, in Dover, where home prices are relatively low, the figure may range from around $300,000. Hence, the figure may be around $16,200 when the same percentage is applied.
In contrast, in areas such as Greenville, where home prices are higher, the figure may be significantly higher. This means the price of homes in Greenville may be around $985,000; thus, the figure may be as high as $53,000.
Who Pays Closing Costs in Delaware: Buyer or Seller?
In Delaware, closing costs are usually shared between the buyer and the seller rather than borne by one party. The ratio in which the costs are shared varies, since many costs are usually negotiable in the purchase agreement. However, in most real estate transactions, the buyer usually pays a higher percentage of closing costs than the seller. This is primarily because most costs relate to obtaining a mortgage.
In Delaware, the final distribution of closing costs depends on the agreement between the two parties. The settlement statement must be carefully reviewed to gain a clear understanding of the costs involved.
Common Closing Costs for Buyers
There are costs the buyer must pay when purchasing a home, known as closing costs. These costs are mostly linked to the mortgage application process. The lender may charge loan-related fees to process the loan application and approve it. The buyer may also have to pay for a credit check and discount points if they wish to reduce the loan’s interest rate.
There may also be costs associated with the home’s title that help validate the property’s ownership. A title search is conducted to verify that there are no legal issues associated with the home. The lender may also require the buyer to obtain a home appraisal to verify that the home’s value is sufficient to support the loan.
Additionally, buyers most often opt to pay for a home inspection. The service allows for any underlying issues with the house to be identified before the deal is sealed. In some cases, an escrow account may be involved in the process. The account holds the money before it is used to close the deal. Finally, in Delaware, it is mandatory to have a real estate attorney involved; therefore, legal fees are likely.
Common Closing Costs for Sellers
Sellers also have various costs to clear before a home sale is complete. The largest expense is usually the real estate agent’s commission. When a seller hires an agent to help them sell a home, the commission is usually taken from the sale proceeds. The amount is usually a few percent of the selling price.
The other largest expense in Delaware is usually the real estate transfer tax. Delaware has a high transfer tax compared to other states. While a seller is usually responsible for paying the transfer tax, in some cases, the parties can agree to share the cost.
The sellers may also choose to pay a recording fee to document the property transaction with the local government officially. Furthermore, the sellers may need to settle any outstanding property taxes and homeowner association dues through the date of closing. If the sellers still have a mortgage on the property, the outstanding mortgage balance will also need to be paid off at closing, including small payoff fees.
In some cases, the sellers may also offer a reduction to facilitate the sale of the home. Lastly, it should be noted that, as we previously mentioned, Delaware law requires the services of a real estate attorney to facilitate the transaction, which is why the legal fees will also be part of the seller’s closing costs.
Delaware Seller Closing Costs: Itemized Checklist in Delaware
Closing Cost Item | Typical Cost Range |
Loan application fee | $150 to $500 |
Loan origination fee | 0.5% to 1.5% of the loan amount |
Home appraisal fee | $400 to $700 |
Real estate attorney’s fee | Around $248 |
Courier fee | $30 to $50 |
Credit report fee | Under $50 |
Title search fee | $60 to $200 |
Title insurance fee | About $6 per $1,000 of property value |
Discount points | Around 1% of the mortgage value |
Transfer tax | About 4% of the sale price |
Home inspection fee | $350 to $450 |
Homeowners insurance | Around $860 |
Recording fee | About $81 |
Net Proceeds Example for a Cash Sale in Delaware
To understand what the seller ultimately receives at the end of the transaction, consider an example. In the case of cash sales, the seller has no mortgage payoff to make. However, the seller must pay various fees, including agent and transfer fees.
Example
In this scenario, the seller sells the home in Delaware for $355,100. This was close to the state’s median home price in 2024.
Sale Price: $355,100
Typical Seller Expenses
Real estate agent commission (5.5%): $19,530
Delaware realty transfer tax: About 4% total, often split
Real estate attorney/settlement fee: $248
Title and settlement services: $900
Recording and administrative fees: $81
Property tax adjustments or miscellaneous costs: $300
Total Estimated Seller Costs: $28,161
Estimated Net Proceeds
Sale price: $355,100
Minus seller costs: $28,161
Estimated cash to seller: $326,939
How to Save on Closing Costs in Delaware
The cost of purchasing a home is already quite high, and closing costs can add thousands of dollars to the overall cost. However, there are a few ways to reduce the costs of closing.
The first option available to the home buyer is to negotiate the closing costs directly with the seller of the home. In some cases, the seller of the home may be willing to bear some of the closing costs to facilitate the sale, especially in a buyer-friendly market.
The home buyer should also carefully scrutinize the Loan Estimate provided by the lender. The Loan Estimate details all costs associated with the mortgage, and the home buyer can try to reduce some of them by carefully scrutinizing the document.
The home buyer can also consider a no-closing-cost mortgage, under which the lender may bear the closing costs in exchange for a higher interest rate on the loan.
Conclusion
It is important to understand what closing costs are so you have a sense of how much you will likely receive after selling your house. For instance, you may have to pay agent commission fees, settlement fees, and taxes. It should also be noted that the transfer tax split in Delaware may be divided between you and the buyer at your own agreement.
Frequently Asked Questions
The seller in a Delaware closing cost calculator estimates costs associated with selling a house, for instance, commissions, transfer taxes, and so on.
The net proceeds calculator for Delaware estimates how much a seller can expect to receive from a sale.
The transfer tax split works so that both parties in a transaction bear an equal burden of the transfer taxes.
The use of a net proceeds calculator in Delaware is important for sellers as it helps in proper financial planning.
Using a Delaware closing cost calculator is important before listing a house for sale.