The first question every potential Friealtor client asks is, “how much will it cost to sell my home?” Most people are unaware of the true costs associated with settlements. It may also come as a surprise that the most expensive part of selling a home is the real estate commission.
At Friealtor, we empower our clients to control the entire selling process. Our Real Estate Agents offer strategic insight into the process. Unlike a traditional agent who charges a 6% commission fee, our agents are paid 4.5% fee. Our philosophy is, “Empowering people to deal directly in a real estate transaction with the help of a licensed agent.”
We also place a huge importance on full transparency for all our clients. That’s why below we have outlined some examples of costs for selling a home:
1. Brokerage Fees / Real Estate Commissions
Let’s debunk the myth behind real estate commissions and brokerage fees. First thing, they are always negotiable. Before signing a listing agreement you should understand the commission fee structure, as well as what services are included. The agreed upon amount should be in writing, which is usually done by signing an ‘exclusive right to sell’ contract. For instance, at Friealtor our Pricing is so clear that we place it on our site for you to see.
2. Repairs Following Inspections
Following a professional home inspection, you may incur the cost of necessary repairs. Something may come up that the buyer or buyer’s bank will want to be repaired as a contingency to purchase. Be proactive by completing a home inspection before listing the property. This way, there are no major surprises when the buyer completes one.
3. Seller Subsidies
Seller subsidies allow a seller to contribute money towards buyers’ closing expenses, down payment, and upgrades to the property. Without sellers’ subsidies, a buyer may not be able to afford the home and ultimately, the seller cannot sell it.
4. Home Warranties
The seller can offer prospective buyers a home warranty or allow the buyer to purchase one. Home warranties may cover many of the major components of a home like HVAC systems, electrical, plumbing, etc. Plus, a home warranty may ensure peace of mind for sellers and buyers. Companies like HMS and AHS offer comprehensive home warranties to sellers.
5. Title Search Cost
Whenever properties change hands; a title search is completed. This ensures the seller has the right to transfer ownership of the property, as well as to discover whether there are any claims, errors, assessments, debts, or other restrictions to the property. The seller and buyer may end up sharing in this expense at closing.
6. Transfer Taxes
Transfer taxes are paid to the local jurisdiction in which the property is being transferred to make the transaction legal and official. To learn what the transfer tax percentage or amount will cost, visit your State’s website. Keep in mind if you have already paid taxes for the year or quarter, you may receive a credit for a pro-rated amount.
7. Capital Gains Taxes
Depending on the amount of profit you make on the sale of your home, and other factors, you may incur capital gains taxes. The amount you pay depends on your tax bracket. To determine if you will have to pay this tax, consult with an accountant.
8. Existing Mortgages, Equity Loans, Liens
Paying off existing mortgages, equity loans, and liens on a home can add up quickly. The final sales price on your home needs to be more than these costs combined. If not, you may need to pay at closing or consider a short sale.
By evaluating the potential cost we’ve outlined above, you can stay ahead of hidden costs when settling your home’s sale. With a dedicated Friealtor Real Estate Agent, you receive strategic insight from a professional who will act on your behalf objectively because they do not work on commissions. Friealtor also saves you a lot of money in the process.