Ohio homeowners with a house on the market might get a slight surprise before they sign the final paperwork. Reflecting national trends and moving hand-in-hand with increased home prices, closing costs in Ohio — those transaction fees that can cut into your home sale profit — ticked up in the first half of 2021 compared to 2020, according to ClosingCorp, a national provider of closing data.
The average home sale price in Ohio was $202,147 in the first half of 2021 compared to a 2020 average of $182,046. Typically, a seller can expect to pay between 5% and 6% of a home’s sale price as commission, plus another 2% to 4% for taxes, settlement fees, and title fees.
While Ohioans can typically expect to pay less in closing costs than sellers in higher-cost places like the District of Columbia or New York State, the average seller in Ohio can expect to pay relatively high closing costs compared to their Midwestern neighbors in Missouri and Indiana.
Ohio seller closing cost overview
Closing costs in Ohio vary by county, in part due to different ways that property taxes are calculated and paid, says Kendall Rodesiler, a top-performing agent and lifelong resident of Northwest Ohio. Rodesiler specializes in single-family homes and has over 15 years of experience serving the Toledo area. However, there are certain closing costs that sellers are typically responsible for. Although some closing costs are negotiable, home sellers in Ohio almost always pay the following, says Rodesiler:
Because most mortgages have 15- or 30-year terms, a seller’s asking price must cover the original purchase price, but anything paid above that ideally leaves the seller with a profit — potentially a substantial one in the hot real estate market of 2022.
Nationally, homeowners are remaining in their homes for the shortest time in eight years, according to ATTOM Data Solutions, a leading provider of nationwide property data. People who sold their homes during the second quarter of 2021 had owned them an average of just 6.3 years, down from 7.61 years in the second quarter of 2020, leaving many sellers with higher than normal balances on their mortgages at the time of sale.
Fortunately for sellers in the United States, selling a single-family home or condo during the second quarter of 2021 generated an average profit of $94,500, up from $60,572 year-over-year, ATTOM’s data shows. So chances are good you’ll have plenty to pocket after paying off your mortgage.
Throughout the state, real estate taxes are billed six months in arrears, according to the Lucas County Treasurer. The first half covers January 1 through June 30 and is billed or collected six months later. The second half covers July 1 through December 31, which is likewise, billed or collected six months later.
Property taxes in Ohio vary from county to county. “I work in several counties, and they’re all different,” Rodesiler says. Furthermore, tax rates in Ohio can vary within a single county. Wood County, for instance, has roughly 80 taxing districts, and each has a different tax rate. In any case, when it comes to selling a home, property taxes are prorated by the day and must be paid by the seller for the dates they still own the home.
In Lucas County, in a practice dating back to the 1940s, real estate taxes are calculated via the “due and payable method.” The seller gives the buyer a credit for a portion of the time that they’ve owned the property to apply to the next tax bill. However, most other counties use the “calendar lien method,” where the seller pays the equivalent of the next tax bill due, plus a prorated share of the following bill.
Both parties also can negotiate this part of the transaction, the Lucas County Treasurer says. For instance, they can agree to use the calendar lien method instead of the due and payable method. “As an agent,” Rodesiler says, “you need to be experienced enough to know which [method] you’re requesting depending on where you’re writing the offer. Lien will cost the sellers a lot more money.”
In cases where closing falls near a tax due date, sellers might decide to simply pay the entirety of the tax bill for the sake of expediency.
Real estate transfer tax and conveyance fee
Ohio has a statewide mandatory transfer tax of $1 per $1,000 dollars of the value of any property sold or transferred for all its 88 counties. Individual counties may impose an additional real property transfer tax of up to $3 for every $1,000 in property value.
“Depending on where I’m writing an offer, it’s going to be different in each place,” Rodesiler says. In Lucas County, for example, this is $3 per $1,000, so the seller will pay a total of $4 per $1,000 in transfer taxes, including the $1 per $1,000 imposed by the state.
In Franklin County, this fee is $3 per every $1,000, unless the grantor of the property receives a homestead exemption at the time of the property transfer. The county auditor has an online calculator to help consumers estimate the cost of this fee.
Regardless of where you live in Ohio, you can check with your county’s auditor to confirm the transfer tax you’ll have to pay based on the value of your home.
Real estate agent’s commission
The national average for agent commissions ranges between 5% and 6% of the home’s sale price, which the seller typically pays. The seller’s agent then splits roughly half of that with the buyer’s agent.
Sellers may also cover these closing costs
There are additional fees that an Ohio seller might negotiate to pay or be required to pay, depending on location. These include:
Title search fee, plus title insurance
Any real estate transaction involves a title search, which uncovers any liens or other claims to the property that would prohibit transferring ownership to the buyer. While the seller often pays for the title search, they may also pay for title insurance, which protects the buyer and their lender from any title issues that might crop up after the sale.
Ohio requires a minimum of $175 for an owner’s policy when closing a home, according to Elko, which assists more than 575 title and settlement agencies, lenders, and attorneys with estimating title insurance costs.
However, the full cost depends on the value of the home and the size of the down payment and usually includes an owner’s policy as well as a lender’s policy. According to Elko, a title policy for the purchase of a $200,000 home with a 20% down payment will cost about $1,087 for the owner’s policy and $763 for the lender’s policy.
The buyer pays for the lender’s policy, but the rest is negotiable and can vary depending on where in Ohio you’re located. In Northwestern Ohio, the seller usually pays for the title policy, for instance, while in Ottawa County, the buyer and the seller customarily split the cost, Rodesiler says. In Northeastern Ohio, buyer and seller also tend to split costs, whereas in Central Ohio, these costs are generally borne solely by the seller.
The title company holds the buyer’s money in an escrow account to disburse once the deal is complete. Ohio Real Estate Title charges sellers a $75 disbursal fee in the seven counties where the company operates — Butler, Clark, Champaign, Greene, Miami, Montgomery, and Warren. However, in other counties, this is negotiable and may be divided between both parties.
The buyer has a right to obtain a property survey showing any land, features, and structures that you legally own. Although this cost is negotiable between buyer and seller, Rodesiler says in her experience, the buyer pays this cost.
Liens, attachments, assessments, or contingencies
If you have any unpaid financial assessments attached to the property, such as homeowners’ association fees, these would be paid from the proceeds and deducted from the final profit.
Likewise, the seller may pay some costs associated with satisfying a contract contingency. For instance, if the buyer requires that the property pass a home inspection, the seller may agree to do minor repairs, negotiate the cost of these repairs, or offer a home warranty.
Before the current market, Rodesiler says the Ohio buyers she met often would add a little extra money to the purchase price but then ask for up to 3% of that back from the seller to apply toward their closing costs. “Because sellers now have so many offers, it’s really difficult for a buyer to ask that because they’re going to be the losing bid,” she says. “Over the last year, buyers are offering to pay up to a certain amount of the seller’s closing costs, which prior to that, I had not seen at all in 17 years.”
In one sale, the buyer offered a $10,000 appraisal gap guarantee, meaning that if the property didn’t appraise at the purchase price, the buyer would cover up to $10,000. If the house did appraise at the purchase price, the seller could use that $10,000 to offset their closing costs. “That’s exactly what happened in that case,” she says. “It did appraise, and my sellers used the $10,000 to offset the commission.”
Real estate attorney fee
Ohio does not require a real estate attorney at closing, but you might need one under certain circumstances, such as selling pre-foreclosure or inherited property, or going through a divorce. A title company also might use an attorney to prepare certain documents. Ohio Real Estate Title, for instance, uses an attorney to prepare the deed and charges sellers $75 for this service.
Estimate your net proceeds after closing costs
If you’re curious about your net proceeds after closing costs, use our Net Proceeds Calculator. Just type in your address, your home’s value, how much is left on your mortgage, and a few other factors such as your home repair budget to arrive at an estimate.
You need to know what you’re doing because it’s going to cost your seller or your buyer a lot more money, depending on how that contract reads.
- Kendall Rodesiler Real Estate AgentCloseKendall Rodesiler Real Estate Agent at The Danberry Company Currently accepting new clients
- Years of Experience 19
- Transactions 692
- Average Price Point $177k
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You’ll receive a final tally of all closing costs
At the end of closing, you’ll receive a settlement statement, a line-by-line tally of every tax, fee, and charge so that you’ll know where this money goes.
Before you reach the settlement stage, however, work closely with your real estate agent to ensure that whichever costs are involved are billed to the appropriate party. The state has so many variations that local knowledge is valuable. “You need to know what you’re doing because it’s going to cost your seller or your buyer a lot more money, depending on how that contract reads,” Rodesiler says.
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