Selling a House in Delaware? You’re on the Hook for These 9 Closing Costs and More
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Caroline Mameesh, Contributing AuthorClose
Caroline Mameesh Contributing AuthorCaroline is an avid writer who grew up in a household where real estate was always a topic of conversation. She knows real estate is a key part in everyone's lives, and she firmly believes in its importance. She enjoys writing on a variety of topics, including pets, fitness, tech/startups, real estate, and more.
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Alexandra Lee, Junior Associate EditorClose
Alexandra Lee Junior Associate EditorAlexandra is a junior associate editor of HomeLight.com. Previously, she served as a writer and social media manager at Santa Barbara Life & Style Magazine, in addition to interning at the nonprofit honors society Phi Beta Kappa. Alexandra holds a bachelor's degree in communication and global studies from UC Santa Barbara, and she has three years of experience reporting on topics including international travel, luxury properties, celebrity interviews, fine dining, and more.
Disclaimer: This article provides an estimate of a seller’s closing costs that is meant for educational and research purposes only; our calculation is not a guarantee.
As a seller, your home sale price and proceeds are very different numbers. You’ll need to subtract your closing costs to determine how much money you’ll walk away with after the sale. So, what are closing costs in Delaware?
In Delaware, sellers typically pay 6% to 10% of the home’s sale price in closing costs. It’s customary for the seller to pay for closing costs like title search, title insurance, and transfer taxes.
We’ll break down seller closing costs with insight from Peggy Centrella, a top Delaware real estate agent ranked in the top 5% of real estate agents in her market area. Trust us — you’ll want a heads-up on these profit deductions, so you don’t get sticker shock when viewing your settlement statement at the end of the sale.
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1. Loan payoff amount
You must pay off your mortgage before you can transfer the title to a new owner. Loan payoff includes the remaining principal and interest owed up until closing.
2. Property taxes
Delaware has one of the lowest median property tax rates in the country. Property tax rates vary by tax districts within the counties. For a general overview, here are the average property tax rates for each county:
- New Castle County: 0.55%; see the New Castle County tax rate for your district
- Kent County: 0.40%; see the Kent County tax rate for your district
- Sussex County: 0.27%; see the Sussex County tax rate for your district
3. Reconveyance fee
Once you’ve paid the mortgage in full, the lender sends you a reconveyance deed as proof. The seller is responsible for paying the reconveyance fee to obtain this official document.
4. Reconveyance recording fee
You need to file the reconveyance deed with the county recording office. In Delaware, the seller and buyer negotiate to determine who will cover this fee. Recording fees vary by county:
- New Castle County: $30 document fee, plus $13 per page
- Kent County: $36 document fee, plus $10 per page, plus $5 per each tax parcel number, and an additional $40.00 if non-conforming
- Sussex County: $30 document surcharge fee, plus $9 per page, plus $1 maintenance fee
5. Realty transfer tax
In Delaware, the seller and buyer must pay transfer taxes on the home sale to the county and the state.
In 2017, Delaware raised the state realty transfer tax from 1.5% to 2.5% for property located in counties and municipalities that impose a local realty transfer tax. For property located in areas that do not charge a local realty transfer tax, the state tax is 3%.
Local county realty transfer taxes vary as follows:
- New Castle County: 1.5% local realty transfer tax for most cities and towns; Arden, Ardentown, and Ardencroft do not charge a local transfer tax
- Kent County: 1.5% local realty transfer tax for most cities and towns; 1% local realty tax in Hartly, Kenton, and Woodside
- Sussex County: 1.5% local realty transfer tax
In Delaware, the 4% transfer tax on property sales is typically split between buyer and seller. First-time home buyers get a 0.5% reduction, lowering their rate to between 0.75% and 1.25% on the first $400,000, with a maximum reduction of $2,000 paid by the buyer at closing.
6. Real estate agent commission
The national average real estate agent commission is 5.8% of the sales price and covers both the listing agent’s and the buyer’s agent fees. Traditionally, the seller pays for both agents’ commissions, though the buyer brings the money to the table.
To estimate how much commission will be for your sale, plug your home’s sale price into HomeLight’s Real Estate Agent Commission Calculator.
7. Attorney fees
Closing costs in Delaware always include attorney fees, as the state requires a lawyer for closing. Your closing attorney manages the title transfer and reviews closing documents.
Flat fee MLS services in Delaware range from under $100 to several thousand dollars; Centrella estimates most sellers pay $450 to $550 on average.
8. HOA dues/condo association fees
The seller must pay any outstanding homeowner’s association dues or condo association fees. These dues are usually prorated according to the time of the sale.
HOA dues vary considerably depending on the location, size of the home, and community amenities. HOAs in Delaware have significant freedom to set and enforce their own rules. A member with a $200,000 property pays more for maintenance and has greater voting power than a member with a $120,000 property. If a homeowner falls behind on payments, the HOA can impose liens and charge fees up to 18% of the annual fees.
9. Seller concessions
Sellers may owe money at closing for financing concessions they agreed to pay for during the negotiation process to help close the sale. Examples of concessions include cash to cover closing costs, repairs, and home warranties.
One of the most common seller concessions is repair credits. When a buyer includes a home inspection contingency in their offer, they can leave the deal with their earnest money intact if the seller refuses to address repairs the home inspector deems necessary. Instead of tending to the repairs, sellers can offer repair credits — cash to cover the cost of needed repairs —to the buyer at closing.
Centrella notes that in a seller’s market, repair credits are less common. In a hot seller’s market, buyers may waive home inspections entirely to make their offer more desirable than the competition’s.
How Much Is Your Home Worth Now?
Home values have rapidly increased in recent years. How much is your current home worth now? Get a ballpark estimate from HomeLight’s free Home Value Estimator.
You may be on the hook for additional closing costs
While these are a seller’s typical closing costs in Delaware, it’s important to remember that many closing costs are negotiable. Your buyer may negotiate for you to cover closing costs they would customarily pay for and vice versa. Work with your agent to ensure you’re paying for the least amount of closing costs possible without jeopardizing your sale.
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