Selling a home, you may be surprised by how many line items appear at closing. Two questions come up again and again: what is the transfer tax? and what exactly is on the statement?
What the transfer tax is
State and local governments charge a fee to record and legally change the ownership of a property deed. That fee is the transfer tax. Who pays it, and in what share, depends on your state and is set in your contract, so check how it is handled in yours before you sign.
There is not one fee, there is an itemized list
Even when a buyer pays cash, the seller's costs are not a single figure. They are itemized on the closing statement (often called the ALTA statement). They typically include items such as:
- Commission
- Admin fee
- Mortgage payoffs
- Transfer tax
- Recording fees
- Notary and document preparation
How to use this
- Ask early for an estimate of your net proceeds, so you are not surprised on closing day.
- Review the itemized statement ahead of settlement, not at the table.
- Ask your agent about anything you do not recognize.
State by state
Transfer tax treatment, and the exact forms involved, differ between Pennsylvania, Delaware and Maryland. Your Foraker agent can tell you how it works in your state and for your specific sale.
General information, not legal or tax advice.
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