If you’ve decided to sell your house and are now wondering about the costs involved in the process, it’s critical to know what the costs will be to avoid any surprises. From closing costs to realtor fees, and other expenses like home upgrades and repairs, this can add up quickly.
However, by understanding the various costs, you will be able to maximize your return on investment and make informed decisions. In this article, we’ll break down everything you need to know about realtor fees, closing costs, and other expenses involved in selling a house. We’ll also provide tips and tricks to help you save money along the way.
Realtor Fees
This is the most common type of fee associated with selling a home. Realtor fees are a percentage of the home’s sale price that is paid to the real estate agent or brokerage as compensation for their services.
Commission for Realtor Services
The commission percentage varies depending on the location and market conditions, but it typically ranges from 5% to 6% of the home’s sale price. For example, if your home sells for $500,000, the commission could be anywhere from $25,000 to $30,000. It’s important to know that it’s negotiable, so you can talk to your real estate agent or brokerage about the terms and decide which one works best for you.
Keep in mind that a higher commission percentage can result in a quicker sale, as the agent will have more incentives to work hard on your behalf. On the other hand, a lower commission may mean fewer marketing and advertising efforts, which could negatively impact your ability to sell the home quickly or for the best price.
Usually, the listing agent and the buyer’s agent split the commission, with each getting a portion of the total fee. In most cases, the seller is responsible for paying the real estate commission.
Closing Costs
Closing costs are the costs that come up at the end of a real estate deal, such as when the seller hands over ownership to the buyer. These costs can include fees for things like title insurance, property taxes, attorney fees, and more.
How Closing Costs are Split
Closing costs can be split between the buyer and seller in different ways, depending on the terms of the sale and the state of the market. In a traditional real estate deal, the seller usually pays the real estate transfer taxes, while the buyer covers most of the other closing costs, such as title insurance and attorney fees.
However, the buyer and seller can talk about the details of the sale and decide who will pay which costs. It’s critical to have a clear understanding of the closing costs before entering into a real estate transaction so that there are no surprises when it’s time to close the sale.
How to Save on Realtor Fees and Closing Costs
Sell your home without a realtor
If you’re comfortable with the selling process and have the necessary marketing skills, you can choose to sell your home without a realtor. This eliminates the need to pay realtor fees, saving you thousands of dollars. Taking the time to choose the right realtor can make a significant difference in the outcome of the sale and the overall experience of the home selling process.
Sell to a home-buying company
Another option is to sell your home to a home-buying company. These companies typically buy homes as-is, so you don’t need to worry about making repairs or upgrades. And because they’re not real estate agents, there are no realtor fees involved.
Cash buyers like Oak Street Properties generally have a streamlined process for buying homes, which allows for a faster sale. In many cases, you can have your home sold in as little as seven to 14 days. You also won’t have to deal with the hassle of negotiating with buyers or juggling multiple offers, since the home-buying company will make you a straightforward offer. By selling to a home-buying company, you can get a quick and convenient sale, freeing up time and resources for other priorities. This is among the best and most recommended options.
Shop around for closing costs
Closing costs can vary depending on the lender, so it’s important to shop around and compare prices. Consider working with a local lender that has a good reputation and offers competitive rates. Contact multiple title companies, escrow agents, and other providers of closing services to get quotes. Don’t be afraid to ask for a breakdown of the fees so you can see what you’re paying for.
Negotiate the commission
If you do decide to work with a realtor, try to negotiate the commission. Some realtors may be willing to lower their fees in order to secure your business. Be clear about your budget, and see if they can work with you. Before you begin negotiating, research the current market rates for real estate commissions in your area. This will give you a baseline for what you can expect to pay.
Ask the buyer to pay closing costs
In some cases, the buyer may be willing to pay a portion of the closing costs. This can help reduce your out-of-pocket expenses. First-time home buyers can be less likely to pay closing costs, as they may not have as much money saved up. On the other hand, more experienced buyers may be more willing to pay as they understand the costs involved in buying a home.
In a buyer’s market, where there are many homes for sale and fewer buyers, it may be more difficult to ask the buyer to pay closing costs. However, in a seller’s market, where there are fewer homes and more buyers, it may be easier.
Take advantage of tax credits and deductions
If you’re selling your primary residence, you may be eligible for tax credits and deductions that can help reduce your overall costs. Consult a tax professional to see if you qualify for any.
Endnote
Aside from listing with a realtor or selling to a home-buying company, there are numerous costs associated with selling a home. Realtor fees, closing costs, and other expenses such as preparing the home for sale, marketing, and legal and professional fees can become overwhelming.
If you’re looking to sell your home, take the time to research your options and understand the costs involved. Seek professional advice from cash home buyers and other experts in the field to help you navigate the process and make informed decisions. With careful planning and a clear understanding of the costs involved, you can sell your home for the best possible price and move on to your next chapter with confidence.
Contact us today and take the first step toward a successful sale.