Have you considered the actual costs to sell your Palm Beach house with a realtor? Think it through before making a final decision on whether to sell “for sale by owner” or with an agent.
While many of us save for a house and actually anticipate the costs that typically come with buying one, few realize that when it comes to selling the same house there are fees and commissions to be paid. In fact, these fees can, in some cases, account for nearly 10% of the total home sale.
While the majority of these costs can fluctuate depending on the current Palm Beach market conditions and are negotiable, as a seller, you should plan and budget for some of them.
An important cost item is the real estate agent or realtor. Different realtors will work and charge differently. Some may charge per item while others may give you an “all-inclusive” charge. Before committing to a contract, find out what it will cost you to sell your Palm Beach with a realtor. Understanding such things help in preventing disappointment when closing the sale.
Often, the realtor’s commission is the largest fee you will have to pay as a house seller. These commissions can range anywhere between 5 and 6% of the total sale cost. The real estate professional you hire should give you value worth the high commission they get paid by ensuring your house gets sold for top dollar otherwise it defeats the whole purpose of engaging one.
Many homeowners attempt to altogether avoid these high fees through the sell-it-yourself method. It’s important to note that taking this approach means you assume all the responsibilities typically performed by the realtor. These responsibilities can include hiring a competent contract lawyer, sale negotiations, and processing the title transfer.
When you are working a “for sale by owner” sale in Palm Beach, working directly with a local real estate investor is a great option. Palm Beach investors will make a fair cash offer, close fast, and you don’t pay a dime in realtor commission. Selling to a professional cash buyer can be simple, easy, and profitable.
Many other additional fees usually get lumped together under the cover of closing costs. When you hire a realtor, such costs may also come under what you pay him or her as in most cases, realtor commissions are paid by the seller at closing. Closing costs may include the filing of documents, fees for title search, credit check costs, property taxes, transfer taxes, homeowners’ and title insurance, and many others. On average, they could run you an additional 2% of the final house sale price.
The good thing is that most of these are negotiable and will largely depend on the state of the housing market in Palm Beach when you are selling your property. If the market is sluggish, these costs could eat up your selling price by anything between 2 and 4%.
Talk to any person who has just gone through the process of selling a home and you are likely to hear some disappointment as they recount how the expected gains were undercut by a variety of expenses. The results won’t, however, appear so shocking when you actually know what to expect during a house sale. You could, for example, incur additional marketing fees if you want your realtor to market the house using different ways like through the TV, radio or even via a local guide.
Real estate agent commission fees form only a part of the fees you can expect to meet when selling (or buying) a home. On top of the brokerage or commission fees, an additional fee that goes to office administration may also apply. Other additional fees outside the brokerage fees you could expect to incur include appraisals, title, and taxes.
Usually, you will not pay any commission in case your home fails to sell and the contract has expired. There are, however, some exceptions such as in case the contracted realtor had already found a buyer or if it was you who backed out of the sale. It is also good to know that some agents will agree to lower their commission fees, especially when they are representing both the house seller and buyer in a sale, a dual agency.
Be aware that when you run a lien and title search – a pre-condition to a title insurance policy being issued – there are often unexpected issues that may arise. Tax liens, mechanic liens, unpaid utilities, an open permit. These “surprises” can add up to quite a bit of cash in some cases.
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If you decide to pony up the money for a realtor, one bright side is that most of the fees are actually paid out at closing, from the sale proceeds. However, the bad news is the fact you will be parting with almost 10% of the sale proceeds.
Are closing costs preventing your sale? One piece of advice is that on some occasions buyers can cover closing costs. Although traditionally the seller pays closing costs, as part of negotiations, don’t hesitate to ask the buyer to pay if that makes the sale more likely to happen.
Once you have added up all the possible costs, it may become clear that perhaps listing the house may not be the best option. Many property sellers find it beneficial to go for a direct sale without engaging the services of a realtor! Personally run the numbers and make that decision that brings you the best results!