What Closing Costs Does a Seller Pay in Massachusetts?

When you sell a house, the figure that matters is not the sale price. It is what reaches your bank account after the mortgage is paid off and the closing costs come out. A Massachusetts seller's costs are fewer than a buyer's, but they are larger individually, and two of them catch sellers out every year: the state deed excise and the septic inspection. This guide goes through each one, with a worked example, so the closing statement holds no surprises.

The free Massachusetts Home Seller's Checklist below lists every deadline and document in the sale, and our closing cost estimator works out the tax and registry figures for your price.

1. The Massachusetts deed excise

The deed excise is the state's transfer tax on a sale, and in Massachusetts it is customarily paid by the seller. It is calculated on the sale price, rounded up to the nearest $500, at $4.56 for every $1,000.

It is paid at closing, out of the proceeds, and it is usually the largest single cost after any commission. The purchase and sale agreement can shift it to the buyer, but that is unusual, so plan on paying it.

2. Paying off your mortgage

Your existing mortgage, and any home equity line, is paid off from the sale proceeds at closing. The closing uses a written payoff figure from your lender, good through the closing date. Interest runs daily, so the payoff is higher than your last statement balance.

Once the lender confirms it has been paid, the discharge is recorded at the registry of deeds. The recording fee is $105. Until the discharge is recorded, the old mortgage still appears on the title, which is why we track it until it lands.

3. The smoke and carbon monoxide certificate

Most residential transfers in Massachusetts need a smoke and carbon monoxide compliance certificate from the local fire department before closing. You arrange the inspection, and the fee is set by your city or town. If the detectors are old or in the wrong places, they have to be replaced before the inspector signs off. Book it early, because fire departments run on their own schedules.

4. Title 5, if your home is on septic

If your home is served by a septic system rather than town sewer, Massachusetts generally requires the system to be inspected under the state's Title 5 rules before the sale. That is customarily the seller's responsibility. A passing report clears the way.

If the system fails, it has to be repaired or replaced, or the buyer and seller have to agree how that will be handled. That can mean a price adjustment, money held back at closing, or a later closing date. It is the one item on this list that can change the deal, so schedule the inspection before you list, not after you sign.

5. Adjustments with the buyer

Costs that run on a calendar are split at the closing date, so that you pay for the time you owned the house and the buyer pays for the rest:

• Property taxes. If you have paid the current bill, the buyer reimburses you for the days after closing. If it is unpaid, you credit the buyer for your portion.
• Fuel oil or propane in the tank, where the agreement provides for it.
• Water and sewer. The town takes a final meter reading, and any unpaid amount is paid from your proceeds. The Municipal Lien Certificate shows whether there are unpaid taxes, water or sewer charges on the property.

Adjustments are why the net figure moves in the last week. We recalculate them to the actual closing date.

6. Commission and attorney's fees

If you listed with a broker, the commission is set by your listing agreement and paid from the proceeds at closing. It is negotiable, and it is a contract term, so read the listing agreement before you sign it.

Your own attorney reviews the purchase and sale agreement, prepares the deed, gets the payoff, answers title questions, and checks the closing statement on your behalf. Our fee for representing a seller is a flat fee, quoted before you commit.

A worked example

Take a $300,000 sale of a home on town sewer, with a mortgage payoff of $180,000. The costs come out like this:

The fixed items alone come to $1,473 before commission and fees. Use the closing cost estimator with your own figures.

How we keep the numbers honest

We send you the closing statement before you sign, with every line explained, and reconcile it against the purchase and sale agreement and your lender's payoff. Our guide to how a Massachusetts closing works explains the stages from offer to recording, and our purchase and sale checklist covers the clauses that matter most.

If you are selling in Western Massachusetts, call us before you sign the purchase and sale agreement.

Real estate closings office: 198 Belmont Avenue, Springfield, MA 01108 (by appointment) Phone: (413) 787-9955