Sellers’ Comprehensive Guide to Closing Costs in Oregon

Selling your home is an exciting prospect, but many homeowners are surprised to learn just how expensive it is to finalize a sale. Sellers are on the hook for many closing costs that significantly impact their net proceeds when all is said and done.

In Oregon, closing costs typically add up to 6% to 10% of the final sale price of your home. However, your total cost can vary depending on what specific factors are involved in your sale.

To help you get a clear idea of what you’ll owe in closing costs after selling your Oregon home, HomeLight spoke with a leading local real estate agent and put together this comprehensive guide.

Here’s an overview of the most common closing costs that apply to Oregon home sales. Don’t worry — we’ll break down each of these costs later on.

Oregon sellers can expect to pay these closing costs

Some closing costs apply to almost every home sale. Let’s review the most common closing costs for Oregon sellers:

Mortgage Payoff

In order to legally transfer ownership of your home, you need to own your home free and clear. This means that if you have an existing mortgage, you have to pay it off before the property can officially change hands.

In Oregon, the average outstanding balance on a mortgage is around $225,600. Typically, homeowners use the proceeds from their home sale to cover this cost. Because this cost is more or less baked-in to the nature of the transaction, we’ve excluded it in our estimate for the average Oregon closing costs figure.

Property Taxes

Local governments levy property taxes, so the total cost varies. However, the average property tax rate across all Oregon Counties is 1.05%. A homeowner is responsible for paying property taxes on their home for the duration they own the property.

Christine Folz, a Salem, Oregon, real estate agent who sells more homes than 65% of her peers, explains:

“The Oregon tax year ends on June 30, and taxes are due on November 5. If you sell your home between those two dates and haven’t paid your taxes yet, you’ll pay the buyer a prorated amount for the days that you lived in the home. On the other hand, if you sell and have already paid your taxes for the year, the buyer will credit you a prorated amount for the taxes you’ve already paid.”

Loan Reconveyance and Recording Fees

Mortgage companies typically charge a fee to close out your loan and record the release of their claim on your property with the state. Often, these charges are combined into a single reconveyance/recording charge.

The price of recording fees varies from county to county. For example, Multnomah County charges a base fee of $86 plus $5 for each additional page of paperwork, while Deschutes County charges $96, plus $5 per page.

Folz tells us that the charge to file the paperwork depends largely on your lender; however, Oregon sellers can expect to pay around $200 overall in reconveyance/recording fees.

Washington County Transfer Tax

If you live in any Oregon county other than Washington, you won’t owe any transfer taxes on your home sale. For those who live in Washington County, don’t worry too much. This county only charges 0.1% of your home’s final sale price in transfer taxes.

Real estate agent commissions

Real estate agent commissions are the single most expensive closing cost for most sellers, and Folz shares that Oregon sellers can expect to pay between 5% and 6% in agent commissions. Note that this includes your agent’s and the buyer’s agent’s commission; it’s customary for sellers in Oregon to pay for both.

While it might seem pricey, the commission is well worth the cost if you hire a truly excellent agent. HomeLight’s research shows that the top 5% of real estate agents sell homes for up to 10% higher prices than their peers, meaning that a good agent will likely net you more profit even with a commission taken into account.

If you want to find a top-performing real estate agent in your area, HomeLight can match you in minutes. All you need to do is provide us with some information about your sale, and we’ll connect you with three leading agents in your area.

Escrow fees

You’ll need to pay a title company to handle several important aspects of the home sale transaction. According to Folz, Oregon title companies typically provide title services as well as escrow account management and charge for everything in a single lump sum called “escrow fees.” Customarily, the buyer and seller split these fees.

Escrow fees vary depending on the value of your home and the company you use. For example, First American Title reports that in Plok, Benton, Linn, and Marion Counties, the company charges 1.15% in escrow fees for a $100,000 home, 0.48% for a $300,000 home, and 0.39% for a $500,000 home.

Title insurance

Finally, Folz tells us that “the seller almost always pays for title insurance for their buyer.” These policies protect the buyer from any future legal issues with the title and, based on rates from First American Title and Western Title and Escrow, can cost anywhere from 0.21% to 0.45% of your home’s sale price.

Oregon sellers may run into these costs

Beyond the basic closing costs, here are some additional costs that may apply to your home sale:

Home warranty

Folz tells us that, in the past year, sellers haven’t had to pay many extra costs because of favorable market conditions. However, she notes that “it used to be that buyers would ask for a home warranty in maybe half of the transactions.”

A home warranty protects the buyer if any appliances or systems break down due to normal wear and tear. These warranties can range from $216 to $1,706, depending on the level of coverage.

HOA Dues

Just around 21% of Oregon homeowners belong to an HOA. If you belong to one, you’ll have to pay your outstanding dues prorated to the day of sale. If you’ve prepaid your dues, the buyer will credit you for the days you won’t own the property.

Folz tells us that HOA fees in Oregon vary widely, from around $50 per month for a low-maintenance community to $600 for condominium membership.

Attorney Fees

Unlike many states, Oregon does not require an attorney to handle real estate transactions. However, you may run into a tricky circumstance where it’s valuable to have expert legal guidance. Thumbtack estimates that real estate attorneys in the Portland area charge around $300 an hour for their services.

Estimate your net proceeds after closing costs

In the final stages of your sale, you’ll receive a settlement statement — an itemized list of all the various costs you need to pay to complete the transaction. Review this document closely with your agent to ensure everything matches up before signing off on the sale.

If you want to get a quick estimate of what you’re likely to pay in closing costs for your specific sale, you can use HomeLight’s Net Proceeds Calculator. We’ll ask a few questions about your property and use the data to generate an accurate estimate of your closing costs as well as the profits of your sale.

Header Image Source: (LYCS Architecture/ Unsplash )