- Buyers mortgage costs: In
most states, the Seller traditionally pays fees associated with the
Buyer getting a real estate mortgage loan. These fees are typically 1%
to 1.5% of the loan amount. ($900 to $1,350 on a $90,000 mortgage)
- Other Closing fees: These
include attorney fees, title search, and recording fees (see
second page of settlement statement).
A good estimate is 1% to 1.5% of the sales price. ($1,000 to $1,500 on a
$100,000 home)
- Real Estate Brokerage
fees:
- Brokerage fees or
commissions can easily be the Seller's biggest cost.
- If the Seller lists
the home with a real estate agent, he can expect to pay between 6%
and 7% of the purchase price ($6,000 to $7,000 on a $100,000 home).
- If Seller sells home
on his own, but accepts a Buyer brought by a real estate agent, the
Seller will usually have to pay half of the above amount or 3% to
3.5% of the purchase price ($3,000 to $3,500 on a $100,000 home).
- The best situation is
where the Seller advertises his own home, gets his own Buyer and
pays nothing to real estate agents.
- The Seller can limit his
costs by stipulating in the Sales Contract a maximum amount he will pay
towards the Buyer's mortgage costs and Other Closing fees.
- Real Estate Brokerage fees
are subject to a separate agreement with the real estate agent and are
not usually limited in the Sales Contract.
- See
"Net Cash from Sale"
for a calculation of how much cash you can expect after the mortgage
balance and fees are subtracted from the selling price.
Steps to setting price (when you have a list of
recently sold homes)
- Check off the homes
most similar to your own in terms of size and number of rooms.
- Walk by and view the
selected homes. Decide if the lots are bigger or smaller than your
own. Is the general condition better or poorer than your house ?
- Set you asking price
higher or lower than the selected homes based on your observations.
Other sources of Pricing help:
- Home appraisal: - For
a fee ($250 - $350 in the Atlanta area), you can hire a real estate
appraiser to put a value on your home, based on its condition, plus
past sales of comparable homes. This appraisal can be used to help
justify your price when negotiating with buyers.
The
Appraisal Network will help you find a local
real estate appraiser. (If that fails you can find appraisers in
your local phone book.)
- Engineer's Inspection:
If you suspect problems with the roof or other major components such
as the plumbing or heating system, you can hire a professional home
inspector (for $200 - $300) to assess the condition of your home.
The engineer's written report will arm you against similar reports
prepared by inspectors hired by prospective buyer's.
Making repairs: You can avoid repair
costs by selling your home "as is," but an "as is" property will
sell for less than top dollar and may take longer to sell. We
suggest making the repairs and putting the cost into the selling
price.
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