The Price of Selling Your House
One of the first things you think about when pondering putting your home up for sale is how much money you’ll walk away with. In fact, most prospective home sellers have mentally spent the proceeds before even getting it officially on the market. But, there are costs associated with selling, so how much will it cost to sell your house?
If you’re thinking about selling this year, start by taking time to research what costs you might be responsible for and how they can affect your profit, or even the budget for your next home.
“In determining net seller’s proceeds, I have a general rule of thumb that works quite well,” Craig Rogers, broker with The Platinum Group, Realtors said. “I inform sellers to expect approximately 93 percent of the final purchase price, less mortgage payoffs, as net proceeds at closing.”
“Commissions ordinarily cost the seller 6 percent of the purchase price, and they can also expect to pay for a title insurance policy (insuring that a clear title is passed on to the buyer), as well as property taxes prorated through the date of closing, since property taxes are paid in arrears in Colorado,” Rogers said. “The title insurance and property tax proration (depending on the time of year the house closes) are variable costs that are tied to the selling price of the home, so the estimation of 1 percent for these two items is generally accurate.”
That realtor commission is split between the buyer’s agent and the seller’s agent. In Colorado Springs, it’s usually split it evenly, though not always. The respective brokerages take their cut from the split, and the remaining amount goes to the agents themselves.
Additional closing costs can include items like transfer taxes, escrow expenses, and fees such as HOA (homeowner’s association) fees, outstanding property taxes and a prorated share of the water and sewage bills.
“If a seller needs a more exact estimation of net proceeds from closing, most title companies are happy to provide a ‘Estimated Net Seller’s Proceeds’ sheet which is typically within $100-$300 of actual figures,” Roger said.
Most sellers, if they’re honest, don’t like the idea of 6 percent of their sale price going to realtor commissions. In fact, a lot of people try to sell on their own to avoid it.
But in reality, real estate agents don’t receive a salary, and the commission fee pays for the time spent marketing your home, negotiating the best price point, handling all of the paperwork of inspections, closings, background checks on land and home permits, and other costs such as photographs, signage, and more. If your home doesn’t sell, the agent doesn’t get reimbursed—or paid for their time.
Even if you choose to sell yourself, you still must pay the buyer’s agent fee because over 93 percent of buyers are represented by a Realtor.
Consider what a good realtor accomplishes for that fee:
· Marketing, signs, advertising, and professional services including photography, staging and more
· The time required for showings, calls, open houses, paperwork, and negotiations
· The legal protection that comes with working with a licensed real estate agent
· Proficient market expertise and neighborhood knowledge
· Expertise to procure the best terms and price
· A wider pool of potential buyers that comes with listing your home on the MLS
· Access to other agents, who have or know potential buyers
Frankly, the savings from listing a home ‘for-sale-by-owner’ doesn’t generally save in the long run in terms of time, stress, and very often accepting a lower price for the home.
“A good real estate agent will not only increase the amount the house sells for, but also makes the transaction much less stressful for the seller,” added Rogers. “Having an experienced, professional representative who is specifically looking out for your best interest is always a good idea. In addition, a good realtor will also reduce the amount of potential liability a seller takes on during the sales process.”
This home sale is most likely one of the largest financial transactions you’ll ever make, so it’s really not prudent to cut corners in hope of saving a few bucks. The Platinum Group, Realtors is the number one independent real estate firm in Colorado Springs. With the average realtor having over 13 years experience they are the local real estate experts. You can always expect Platinum service and Platinum results as any price point when you choose anyone of their agents to represent you when buying or selling your next home.
For a no-obligation consultation, call today: 719-536-4326 or visit PlatinumHomesSales.com.