There are closing cost associated with closing a real estate transaction that are traditionally identified as a Sellers Expense or a Buyers Expense. 

Sellers closing cost typically include real estate commission, attorney/title company fees associated with preparing documents required by the county and state to transfer the property to the new owner(s), real estate property taxes prorated as per agreed to between the parties as stipulated in the purchase agreement, state deed tax, and recording fees as applicable.

Buyers will have their own closing expenses associated with title work, loan processing, and closing attorney/title company fees

In the event there are questions or discrepancies regarding the property lines a survey may be required and this is typically a seller’s expense.  It is reasonable to expect an owner of a property to know where the property line is located to avoid future issues with neighbors. In some situations it maybe reasonable for  the buyer  to pay or portion of the expense.

When selling rural properties dependent on a private water and septic system, the property will be valued with the condition of the well and septic in working order and meeting state and county requirements unless otherwise noted.  

Wells are typically a simple water test for bacteria and nitrates. IF bacteria is present chlorination by a professional will be required.  IF e coli bacteria is present and does not clear up after a couple chlorination’s the well maybe contaminated from a failing septic system or other neighboring fecal matter.  Nitrate levels of under 10 ppm are desired in the state of Minnesota. IF unable to clear up with chlorination, water filtration systems may be effective to provide clean filtered water. 

In rural areas that require a private septic subsurface system the local county and state requirements must be met to transfer a property and record the sale. You must have a septic inspection providing a system that  fails to meet current code requirements the septic will need to be brought up to date, typically as a sellers expense and done prior to closing. IF unable to the county will allow the sale to transfer when funds are held in escrow with the closer to provide payment the septic once completed with unused money remaining being refunded to the seller.  In a few situations the buyer and seller may negotiate for the buyer to take over the escrow and possibly even pay for the septic.  Typically, this will be reflected in the purchase price paid to seller.

NOTE: Because wells and septic systems are costly improvements lenders require both the well and septic be in compliance as required by local and state ordinances  or funds are escrowed out of the closing proceeds to cover the expenses and ensure issues are addressed to protect the property taken as collateral for the loan.

There may be some other expenses that related to your property specifically outside of these traditional expenses, such as probate or other estate and trust situations, these expenses will vary and are personalized to the transaction.

Have questions? Feel free to contact us for all your real estate needs! 

Roxanne Johnson, Broker, ABR, CRS,GRI