July 17, 2017

Adding up the costs when selling

Adding up the costs when selling
Bay Equity | Corporate News

According to a recent study by Zillow, the price of selling a home is about $15,000.

It costs to sell? But isn’t selling about making money?

Sellers often forget there’s also going to be money going out for little things like staging, painting, landscaping and cleaning. Then there are the big chunks such as your real estate agent’s fee and the closing costs.

Since 63 percent of today’s sellers have never sold before, as you can see, the “price of selling” can be a big surprise

So let’s start at the top. Most real estate agents’ fees are paid through a commission. Usually about 6 percent of the purchase price, the commission, is subtracted from the proceeds of the home sale.

The problem is thinking of the commission as something you are losing. A good agent builds the commission into the price of the home and adjusts accordingly.

The amount collected is usually an equivalent return for their expertise in the marketing, pricing, paper shuffling, legwork and timing that goes into selling a home—all valuable services.

Closing costs, typically amounting to about 3.5 percent of the sale price, are miscellaneous fees separate from the real estate fee. They go toward processing, title company fees, recording, taxes, insurance and other expenses.

Depending on the sales contract, they may be covered by the buyer or the seller. But it’s important to remember that buyers often expect the seller to cover all or most of their closing costs.

In that case, it’s not a cost, but it’s not money in your pocket either. That’s why buyers and sellers often bicker on the percentage to be paid and include it in the sales contract.

Improving the aesthetic appearance of the home is a variable the seller has more control over, and the price varies from region to region.

In the end, the listing price isn’t the only number sellers should focus on. Fees outside the price of the house can add up, and you don’t want any surprises.