Seller closing costs in Louisiana

Does Louisiana have a transfer tax when you sell a house?

Not a new one, and the constitution keeps it that way. Article VII, Section 2.3 of the Louisiana Constitution has barred the state and every political subdivision from levying any new tax or fee on the sale or transfer of immovable property after November 30, 2011, including documentary transaction taxes.

The same section lists what does not count as a transfer tax: fees for recording, filing, or maintaining the documents, impact fees for development, annual parcel fees, and ad valorem property taxes. So the deed costs you will see are recording charges, not a percentage of the price.

Those recording charges follow a uniform schedule in R.S. 13:844 for clerks of court acting as recorders: $100 for a document of one to five pages, $200 for six to twenty-five pages, and $50 to record an act or affidavit canceling a single mortgage. Compare a Florida seller on a $400,000 contract, who pays $2,800 in deed stamps before anything else.

What is an act of sale, and who prepares it?

The act of sale is the Louisiana deed. Civil Code article 2440 requires a sale of immovable property to be made by authentic act or by act under private signature. An authentic act, under article 1833, is a writing executed before a notary public in the presence of two witnesses and signed by the parties, the witnesses, and the notary.

Article 1833 also lets the parties sign at different times and places, before different notaries, as long as each signature is made before a notary and two witnesses. A seller who has already moved can sign in another city and send the original back to the closing notary.

The notary or title company that prepares the act quotes its own fee, and so does the title company for the owner's policy and the title examination. Louisiana law does not assign either cost to the seller or the buyer. The purchase agreement does, so read its closing cost lines before you accept an offer, and ask a Louisiana real estate attorney or the closing notary if a line is unclear.

How are parish property taxes prorated at closing?

You owe the days you owned the house in the calendar year, and the buyer owes the rest, but nobody has paid this year's bill at a spring or summer closing. In East Baton Rouge, the sheriff's tax office says the assessor delivers the roll by November 15, notices go out in the last week of November, taxes are due on or before December 31 of the same year, and interest of 1 percent a month runs on anything unpaid after that.

So at a closing in May or June, the statement charges you for your share of the estimated bill and credits it to the buyer, who pays the full bill in December. A closing in December, after the notice has gone out, may instead have the bill paid from the proceeds at the table.

The estimate starts from the most recent bill, which reflects your own exemptions. Ascension, Livingston, West Baton Rouge, and West Feliciana sellers should read the same figures off their own parish bill.

How is the mortgage canceled after a Louisiana closing?

Paying the loan does not erase the mortgage from the parish records. A cancellation has to be recorded. Under R.S. 9:5167.1, the lender must execute and deliver acceptable cancellation documentation within 60 days after it receives full payment according to its payoff statement.

If the lender misses that window, the statute lets an authorized title insurance officer or the closing notary record an affidavit of cancellation, after giving the lender at least 15 days written notice with a copy of the proposed affidavit. Recording the cancellation costs $50 under the uniform schedule.

Order the payoff early. Federal rules give a servicer up to 7 business days to send an accurate payoff statement after a written request, and the figure includes interest through the payoff date, not just the balance on your monthly statement.

Do I need a termite certificate to sell in Louisiana?

No statute requires one for every sale, but the purchase agreement or the buyer's lender may, and the report itself is regulated. The Structural Pest Control Commission's rule on wood destroying insect reports, in Title 7 of the Louisiana Administrative Code, limits a commission-approved report to inspections made for an act of sale or a refinance. It must be issued by a licensed termite control operator or a certified technician working under one.

Because the report is written for a specific transaction, order it once you are under contract, inside the inspection window the agreement sets. If you hold a termite contract with renewal records, put that file with the report so the buyer sees the treatment history.

What condo or HOA papers does a Louisiana seller pay for?

For a condominium, R.S. 9:1124.107 puts the duty on you. Before the buyer signs a purchase contract, or at least before conveyance, a unit owner who is not the developer must furnish the declaration, the bylaws and rules, and a certificate from the association covering assessments, reserves, the budget, pending suits, and insurance. The association has 10 days after your request to produce the certificate.

Timing matters because of the remedy. Until the buyer receives the certificate and for 5 days after, or until the sale closes if that comes first, the buyer may void the contract. Ask the association what it charges to prepare the certificate, and check the purchase agreement for who pays it.

A subdivision homeowners association that is not a condominium works from its recorded declaration. Ask the management company early for the dues status, any transfer charge, and the paid-through date, so the closing notary can settle the account from your proceeds.

Should I have a flood elevation certificate ready?

If you have one, yes. FEMA no longer requires an elevation certificate to buy National Flood Insurance Program coverage, but an owner may still submit one to the insurer to see whether it changes the rate, and a buyer pricing flood coverage may ask for it.

If you carry an NFIP policy, you can assign it to the buyer at closing, with or without a mortgage involved, and FEMA's Risk Rating 2.0 materials say a discount on the policy carries to the new owner through that assignment. Bring the declarations page to the closing file.

What does the math look like on a $400,000 contract?

An illustration with round, made-up figures: a $400,000 contract, a payoff of $210,000 with interest to closing, an estimated parish tax bill of $3,600, and 180 days of the year owned before closing.

Tax proration: $3,600 x 180 / 365 = $1,775.34. Mortgage cancellation recording: $50.00. Payoff: $210,000.00. Those three lines total $211,825.34, which leaves $188,174.66 before brokerage compensation and any notary, title, termite, or association charges the purchase agreement assigns to you. There is no transfer tax line to add.