Although we are currently in a buyers market (or as some may want argue, a do not buy-do not sell market), some people are still selling their homes. Before you start asking around for realtors (or if you were super keen, doing it yourself), you should consider the costs involved in selling your home.
Breaking down the numbers will help you decide a price that you are comfortable with when selling your home. You don’t want to go ahead with what the realtor says and suggests and then later find out that you are “in the hole” because you didn’t factor in the real estate commissions that are due. The last thing you want is a feeling of anti-climactic non-excitement when realizing that the money you were hoping to make off your real estate sale wasn’t really all that much to begin with.
Here are some expenses to consider when selling your home:
Real Estate Commissions
Unless you are planning to sell your home yourself or planning to choose a cheaper real estate company that uses smaller commissions, you will likely have to pay the typical real estate commission rate, which is:
7% on the first $100,000 and 3.5% on the remaining balance. This fee is split between the buying and selling real estate agent and the person selling the house has to pay this fee. It probably doesn’t seem like much, but on a $350,000 home that is equivalent to:
$7000 + $8750= $15,750
If you made money on your home that commission probably won’t phase you very much, but if you can barely get what you paid for the home, you might want to think twice about selling in the current buyer’s market. Continue Reading