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Seller's Guide

Understanding Seller Closing Costs in Vermont

What Are Seller Closing Costs?

Seller closing costs are the expenses you pay when transferring ownership of your property to the buyer. Understanding these costs is crucial for calculating your actual net proceeds from the sale.

Detailed Cost Breakdown

Attorney Fees

$800-$1,500

Legal representation for seller

  • Seller's attorney: $800-$1,500
  • Services include: Deed preparation, title research coordination
  • Payoff calculations and closing coordination
  • Vermont is an attorney state - requires separate attorneys for buyer and seller
  • Fee varies based on complexity and attorney experience

Mortgage Payoff

Varies by loan

Outstanding principal, accrued interest, and any penalties

  • Outstanding principal balance
  • Accrued interest (prorated to closing date)
  • Prepayment penalty (rare, but check your loan documents)
  • Home equity loan/HELOC payoff (if applicable)
  • Note: This is not a 'closing cost' but comes out of proceeds at closing

Property Taxes (Prorated)

Varies by town

Credit buyer for taxes paid beyond closing date

  • Credit buyer for taxes paid beyond closing date
  • Vermont property taxes typically paid in advance (varies by town)
  • Bennington County: Often paid quarterly
  • Rutland County: Often paid semi-annually
  • Example: If you paid $6,000 for the year and close June 30, you credit buyer $3,000

Recording Fees

$15-$75

Town clerk fees for recording documents

  • Deed recording: $15-$25 first page, $5 per additional page
  • Mortgage discharge recording: $15-$25
  • Other lien releases: $15-$25 each
  • Paid to town/city clerk where property is located

Transfer Tax (WHO PAYS)

1.45% (usually BUYER pays)

Important: Buyer typically pays in Vermont

  • IMPORTANT: In Vermont, BUYER typically pays the 1.45% transfer tax
  • Some sellers may agree to pay as negotiation incentive
  • If seller pays: Add 1.45% to your costs
  • Example: $400K sale = $5,800 if seller agrees to pay
  • This is a common negotiation point in buyer's markets

Other Potential Costs

  • HOA transfer fees: $200-$500 (if applicable)
  • HOA dues (prorated to closing date)
  • Current Use program exit fees (if enrolled - can be significant)
  • Survey (if buyer requests and seller agrees): $300-$600
  • Home warranty for buyer: $400-$600 (if offering as incentive)
  • Buyer closing cost credits (if negotiated during inspection)
  • Repairs or credits from inspection negotiations

Calculate Your Net Proceeds

Use this calculator to estimate your costs and net proceeds from your home sale

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Formula:

Sale Price
- Real Estate Commission
- Attorney Fees
- Recording Fees
- Prorated Property Taxes
- Other Agreed Credits/Repairs
- Mortgage Payoff
= Your Net Proceeds

Ways to Reduce Your Closing Costs

Offer Home 'As-Is'

Avoid repair credits by selling as-is, but this may affect final sale price

Pay Off Liens Early

Avoid rush fees and complications by resolving liens before listing

Time Closing Strategically

Minimize tax proration by timing closing near tax payment dates

Shop for Attorney

Compare attorney fees, but prioritize experience over lowest price

Pre-Pay Current Use Exit Fees

If enrolled in Current Use, handle exit fees proactively if applicable

Negotiate Commission

Carefully negotiate commission rate - but be aware that lower rates may affect marketing reach and buyer agent interest

Vermont-Specific Considerations

Important factors unique to selling property in Vermont

Current Use Program

If enrolled, may owe land use change tax when selling (can be significant - 10% of fair market value)

Act 250

If property has Act 250 permit, ensure compliance and transferability

Wastewater System

Provide existing system documentation to buyer (no cost if you already have it)

Well & Septic

Some sellers offer to pay for buyer's inspection ($400-$1,000 total) as negotiation incentive

Underground Oil Tank

If present, may need assessment or removal ($500-$1,500+)

What Sellers DON'T Pay

Common misconceptions about seller responsibilities

Buyer's attorney fees
Buyer's mortgage costs (origination, appraisal, credit report, etc.)
Buyer's title insurance
Buyer's home inspection
Property transfer tax (BUYER pays in Vermont, unless negotiated otherwise)
Buyer's survey (unless agreed to pay as incentive)
Buyer's mortgage insurance (PMI)

Timeline of Payments

Before Listing

  • Photography ($150-$400)
  • Staging (optional, $500-$2,000)

During Sale

  • Maintain utilities
  • Keep homeowner's insurance active
  • Continue mortgage payments

At Closing

  • All closing costs deducted from sale proceeds
  • Mortgage payoff processed
  • Net proceeds calculated

After Closing

  • None (if all paid at closing)
  • Receive net proceeds via wire transfer within 24 hours

Closing Day: What to Expect

Your final step to completing the sale

Before the Closing

  • Review final HUD-1/Closing Disclosure in advance
  • Bring valid photo ID (driver's license or passport)
  • Confirm wire transfer instructions with your bank

At the Closing

  • Sign the deed and transfer documents
  • Review and approve final settlement statement
  • Hand over keys, garage openers, and access codes

After the Closing

  • Receive net proceeds via wire transfer (typically within 24 hours)
  • Keep all closing documents for tax purposes
  • Cancel homeowner's insurance and utilities after transfer
  • Option: Can sign documents in advance with power of attorney if unable to attend

Ready to Sell Your Vermont Home?

Understanding your closing costs is the first step. Let's discuss your specific situation and create a customized net proceeds estimate.

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