Payoff is not the same as balance

The number on your mortgage statement is the principal balance. The payoff figure is what the lender needs to release the lien on a specific date: principal, interest accrued to that date, and any fees. It is always higher, and it expires — payoff letters carry a good-through date.

Get the payoff figure before you evaluate an offer. It is the single largest deduction for most sellers and the one people most often estimate wrong.

Liens come out of proceeds, not your pocket

Delinquent property taxes, HOA balances, contractor liens, judgments, and second mortgages are all identified in the title search and paid at closing from the sale proceeds. You do not need to clear them first — clearing them usually requires money, and the money comes from the sale.

What causes delays is a lien nobody mentioned. A release that has to be chased from a lender that no longer exists can take weeks, so it is worth naming everything you know about up front.

What differs by state

  • Florida: documentary stamp tax on the deed at $0.70 per $100 in most counties; in Miami-Dade and Broward it is customary for the buyer to pay for the owner's title policy.
  • Texas: no transfer tax at all; the seller customarily pays for the owner's title policy, at rates set by the state.
  • Georgia: transfer tax of $1 per $1,000, and closings are conducted by an attorney.
  • North Carolina: excise tax of $1 per $500, attorney closings, and a local land transfer tax authorised in seven coastal counties.

Frequently asked questions

What closing costs does a seller pay?

Typically title and escrow fees, recording, the state transfer tax where one exists, prorated property taxes, any HOA transfer or resale fees, loan payoffs, and agent commission if the property was listed. There is no commission when we buy directly.

Do I have to pay off liens before selling?

No. They are paid from the closing proceeds.

What if I owe more than the house is worth?

The sale can still be possible through a short sale with the lender's agreement, or by negotiating reduced payoffs with junior lienholders. Start with the lienholders.

Why is my payoff higher than my balance?

Payoff includes interest to the closing date plus any fees, and it is quoted good through a specific date.

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