Closing Costs When Selling A House in Rhode Island

Selling your home is a complex process no matter what state you live in. When it comes to selling real estate in Rhode Island, you must be aware of the general and state-specific costs you’ll have to pay when closing a deal.

Sellers often forget that not all of the out-of-pocket fees come from the buyer’s end, and it’s important to be prepared to face certain costs upfront rather than being surprised by them later. This may seem like an overwhelming task, but the more you learn beforehand, the easier it will be when the time comes to officially sign off on your home.

Interested in putting your property on the market? Here’s what you need to know about the closing costs when selling a house in Rhode Island.

RI Closing Costs: What to Expect

Below, we’ll list the major closing costs and fees associated with selling your home in the state of Rhode Island. Many of these fees and costs can (and likely will) be negotiated between you, the buyer, and the real estate professionals helping you make the best deal.
It ultimately depends on the kind of market you are in. In some cases, you may want to offer to pay a larger amount of the fees in order to make your home more attractive to the buyer potentially purchasing your home. But if it’s a “seller’s market,” you may be able to negotiate paying less during the closing process.

Here are the major costs associated with selling your Rhode Island home.

1. Attorney’s Closing Fee

Even if you are a DIY seller choosing to sell without the help of a real estate agent, there still needs to be an attorney involved at some point. This is because an attorney is the only person authorized to pass on the title of the property to a new owner. In some cases, you must hire the attorney, while in other cases, a title company can do it for you.

The attorney will charge their own fee for assisting in the successful sale of your home. In Rhode Island, this fee can range anywhere from $800 to more than $1,000.

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2. Transfer of Deed Tax

The amount you must pay for your deed transfer tax actually depends on which Rhode Island municipality the home is located in. You may want to speak with some experts in your area so you can get a better idea of how much you should put aside for this specific closing cost.
In some municipalities, there is a single flat fee for the deed transfer tax. But other areas might charge in accordance with the home’s selling price; for example, $10 for every $1,000 of the cost will be charged to transfer the deed.

In RI, the standard transfer tax is $2.50 for every $500 of the home’s selling price.

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3. Existing Money Owed: Liens, Mortgages, Loans, etc.

If you still owe money on your home, such as a mortgage, you need to pay it off as a condition of selling. If you can’t pay all of this off from the sale of your home, then special financing circumstances may be required.

Beware of doing things this way, as some mortgage providers might actually charge an extra fee for paying it off early, or paying it off late, while others have a fee for recording their service with you.

It’s important that you get ahead of the game by contacting your mortgage company to find out what exactly the additional costs may be.

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4. General Closing Fees and Escrow Fees

Before the entire selling process can be completed, the seller must pay a fee for the escrow process. Title companies (or escrow companies if you are not going through title) are usually the ones responsible for charging this fee, and they will hold onto your deed and all of the money the buyer pays until you have covered this fee on your end.

There isn’t an exact number to put on this fee as it varies widely by escrow company and it can also change depending on whether the sale of the home is contingent upon something financial. However, you can rely on the quote given to you by your escrow company, as the final costs are typically very close.

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5. Property Taxes

It is the seller’s responsibility to cover any property taxes you may still owe on the property. If you have any outstanding amounts, you need to get that taken care of as quickly as possible. In most cases, you must pay up to the day of closing, in which case you will be charged a prorated amount.

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6. Broker Commission

Your real estate broker will take a cut of the total purchase price of the house, which on average is between 5% and 6% in Rhode Island. Keep in mind that you do have options when it comes to selling your home, and you are not required to go through a broker, or an agent. If you are looking to cut down costs, you can try to sell your home directly through the MLS. However, working with a broker/agent can often help you navigate details that could cost you thousands of dollars, making the experience go a lot more smoothly.

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7. Additional Fees and Loans

Aside from the major closing costs and fees associated with selling your house, there are a few smaller fees that you must consider. Some of these fees may not be required, but should still be considered. Keep a lookout for the following:

Courier Fees

You can choose to use a courier to deliver all of your loan payoffs or other documents while you sell your home. In this case, the courier typically charges between $25 and $100 depending on how many deliveries are required.

Estoppel Letter

You only need to worry about this if the home you’re selling is part of an HOA. Estoppel letters include the homeowners’ association’s account of the state of your home and whether you owe anything to them.

Smoke Detectors

In Rhode Island, there is a state-specific law that requires sellers to put smoke detectors in the home. RI General Law 44-30-71.3 states that you must purchase a certificate for $30 which proves that you have successfully installed these in the home.

Utilities

If you have any overdue utility bills, you need to pay them all the way up to the date of sale.

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Conclusion

Going through the process of selling your home in Rhode Island requires a certain amount of closing costs and fees depending on the complexity of your sale. Some costs are required both by the state of Rhode Island and by the companies you are working with, such as your mortgage company, while other costs are varied and negotiable, such as a broker’s fee and courier payments.

It’s important to go with an expert that you can trust to guide you through the process so you don’t have any surprises waiting for you at the end.

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