Selling Home Includes Title Company's Transfer Taxes

Added February 28, 2009 by Ilyce R. Glink

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Summary: What are the seller charges that are listed on the statement you receive from the title company after selling a home home. Ilyce explains that every state has taxes called transfer stamps that the seller must buy so the title company can put them on the deed before the home sale is final. The transfer taxes are public record, so you can check with the title company to see if you have been charged correctly.

Q. Recently we sold our family home in Sonoma County, California. Itemized on our "Final Settlement Statement" from the title company were seller charges of $899.80 for "County Documentary Transfer Tax to First American Title Company." What do such significant charges to the seller represent?

A: You should ask the lender or title company, but nearly every county, state and local municipality raises money via "transfer taxes." These are stamps that sellers a required to purchase that must be affixed to the deed in order for the transaction to close.

These transfer taxes are based on the sales price of your home, and there are various ways for a county to calculate the tax. Some charge $5 per $1,000 of sales price, others charge as little as 25 cents per $1,000 of sales price. Other counties or states charge a fixed fee.

The transfer taxes are public record, and you could certainly check out whether you were charged correctly or not. You could also call the title company and ask them to explain the charge. Finally, take a look at your truth-in-lending statement. The charges should have been detailed there as well.

Jan. 19, 2009.

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