Selling a home

[houseelf]

Besides the 6% typical commission, what are the other hidden costs of selling a home? i.e. What would be a realistic portion of equity that is necessary to get rid of a home?

Kelly

[mommax3]

I don't know hard numbers, but our typical costs were new towels and area rugs for kitchen and bathrooms, cleaning service 1x/week during the time it was for sale, and the cost of small repairs/painting that needed to be done to spiff the place up....which varies depending on how much you have to do and whether or not you will be able to do it yourself. Don't do anything big unless a realtor absolutely positively recommends it. If you know the realtor you are going to use, have them do a walk-through with you 3 to 6 months before you list it to give you time to make any changes they recommend.

That's my Kelly, always on top of things! (you know I love you!)

Sally

oy vey! our commission was 7% on the 1st $100K / 5% on everything after - and that was standard for the 2 realtors we dealt with (different companies). After the commission it really depends on what you agree to with the contract, etc. We agreed to pay closing costs, which was another 3.5%. Plus, it will depend on what work you need to do before putting on the market, what costs there are in your area (in my case there were city required inspections and repairs). To give you an idea - we bought our house in 2000 for $116K, and it just sold for only $124K b/c of the depressed market (originally listed at $149K). Even though we never refinanced or took a 2nd mortgage, we still had to shell out $1900 to cover the closing costs. This is after spending about $1500 to get it 'market ready' before we left, and another $700-ish since we've been gone. The realtor commissions were $8100 , although, at least on MY realtor's side, he earned it.

I'm sick over it all.

[MissCrabette]

Kelly,

Depending on where you live, the agent's commission may be slightly lower than 6%. The market has slowed down quite a bit in my area so now the standard commission tends to be around 5%.

Even if you have no home improvements to make and if you don't ofer to help the buyer with closing costs, there are still some things that you might end up paying (transfer taxes, documentary stamps on the deed, and title insurance). Again, this varies from state to state so you may want to talk to a real estate agent where you live. If this wasn't complicated enough, your costs could also depend on the type of loan your buyer is getting.

[houseelf]

Thanks guys,

Yes I'm jumping the gun a little and trying to get information way in advance because....

deep breath...

I'm thinking about trying to sell our townhome by ourselves. A dear friend of mine recommended a company that offers a package with a MLS listing for $700. If after some time the house doesn't sell, we can upgrade with this company at 4% for full agent representation. We will definitely need to have a fully authorized agent if we don't sell it by the time we move. (shudder).

We're going to try it this way because we own a pretty standard three bedroom townhome in a good neighborhood close to the Cities (as opposed to some unique far flung property). It makes more sense to me.

And yes, we will be paying for a storage unit for all the crap and a weekly housecleaner. I can only do so much.

Kelly

[MissCrabette]

Kelly,

Let me just be the devil's advocate here. Make sure you know what you're getting for the $700 because some companies here make you schedule your own showings or don't offer any guidance when it comes to all the legal matters of selling a home, and they most definitely don't negotiate wih the buyers. As for the 4%, you should be aware that the agent of a willing buyer may not want to work for a reduced commission (yes, his commission will come out of the 4%, after your agent takes his share). Unless the buyer is willing to make up for the difference, the buyer's agent will have to ask his manager to accept the reduced commision, which may or may not happen. Then you're out of a buyer. Just saying.

As for the 4%, you should be aware that the agent of a willing buyer may not want to work for a reduced commission (yes, his commission will come out of the 4%, after your agent takes his share). Unless the buyer is willing to make up for the difference, the buyer's agent will have to ask his manager to accept the reduced commision, which may or may not happen. Then you're out of a buyer. Just saying.

Really, really good point that I would not have thought of. But why am I even reading this? I have no intention of selling a house again. EVER.

Bitter? Moi?

We (I, DH was about to crawl under the table) negotiated our comission down to 5.6%. I made it clear I was interviewing them. Standard commission in our area and for the market was 6%. She advertised the house in her office pre-listing, did the professional photos and video, and did newspaper advertising, and maybe pre-listing mailings? I told her I would let her have an open house -- not many sales come out of those and it is more a chance for them to get clients (IMO). I also declined any longer term, ie magazine or monthly flier, advertising and a few other things I don't remember. I made the contract a shorter term because if it wasn't wrapped up by that date, I wanted a new agent anyway.

I think those are good points to check out re: what are they willing to do for 4% and that the buyer's realtor might not go for it. If you start on the earlier side, it would be easier to try FSBO and then find an agent if it doesn't work out.

Out of the proceeds of the sale: the commission, a BS broker admin commission of $199, prorated water/sewer and real estate taxes, $100 title closing fee, $1200 title insurance, and a $40 title processing fee, water and sewer escrow (got that back after 60 days). The loan payoff will come out of that too. Whatever is left is yours, all yours!

I believe that the title insurance fee is based on the price of the house, a little less than one half of one percent in our case.

I agree about making changes, modifications, updates, etc as recommended by your realtor. There were things we were sure we would have to do that we ended up not doing -- saved time and $$$. Most things we did were more labor related than actual purchase/supplies related. We did have to pay $300 to have a joist in the ceiling repaired and.....$7,000 to have our sewer line replaced. Had it not been for the sewer, the expenses to sell the house would have been very manageable.

My most important pointer? Buy a caseload of Magic Erasers. Or at least the 4 pack. That saved our bacon on repainting walls and trim.

[DCJenn]

Since we JUST got a contract, these are our fees:

5% commission to our realtors, since the buyer agent is from another realty firm we offered an additional .25% to that agent. Total is 5.25%
However, they put the house on the MLS, held Open Houses every other weekend since MARCH, put ads in all of the local newspapers and did two huge mailings of professionally taken pictures that were made into a 5 X 8 Postcard- plus they had super glossy brochures made for people to take with them. Definitely worth my not having to do anything but vacuum and clean up toddler toys.

Cleaning Crew: roughly $100 bucks every other week since March.

Transfer taxes and fees- 1.1% of the price

We aren't paying closing costs so that helps.

Other incremental expenses- fresh flowers for all open houses- about 50 bucks every time. New pots for outside plants, new table clothes, kitchen towels, bathroom details (towels, rug and shower curtain). Painters: $1500 to finish the rest of the house. Condo documents: $130

Hope this helps-

Jenn