Best of Luck,
Even though I am late to the party here, I would reiterate the 10% cost factor for the many reasons mentioned below. There are ways to cut costs and most end up hurting your net bottom line by lowering your gross proceeds.
Good Luck and great question.
Coldwell Banker Burnet
licensed MN Real Estate Broker
or are you selling by owner?
It makes somewhat a difference in the initial calculated costs you will definitely occur, but then without the assistance, marketing and advertising of a Realtor and his/her negotiation skills and help in preparing your home right for sale, you may also not get it sold at the most advantageous sale price.
So you agree to pay commissions or the buyer will want to pay less for your home for sale by owner as they know you are not paying a broker. Also consider if you put your home on the market by owner a REaltor with a buyer may contact you and ask if you cooperate with a broker who brings you a buyer
at a lower commission but stil at a commission % of the sale price....
When considering your net to seller, you have to consider more than just the actual cost you can foresee, but you also have to consider that you may have to reduce the asking price (here a correct
list price for your market area is very important - discuss this in detail with your listing agent),
and once a buyer presents an offer you may still need to negotiate on the price, then there will
be an inspection and you may end up having to give the buyer a credit at the closing for some
important repairs (like items that are against code) or other, and then the commissions and then
your own closing costs, loan pay off, survey etc. etc.
Sit down with an experienced Realtor and go through all of it in details, if you are in need of
a good local Realtor in your area, feel free to get back to me and I would be delighted to refer
several to you for consideration.
Edith YourRealtor4Life & Chicago and Northern Illinois Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties, 30 Green Bay Rd, Winnetka, Illinois 60093 ---- EdithDoesItRight@yahoo.com or EdithSellsHomes@gmail.com Check out my website at htttp://www.tinyurl.com/MeetEdithHere
get to know me better and learn about my experience, expertise, services available and letters of recommendation of former clients..... Also you can sign up on my site to search for properties in my expanded service area. HAVE THE MOST WONDERFUL DAY :)
- 1% of sales price is a good rule of thumb for closing costs.
- 5-7% of sales price is typical for commissions. At the end of the day interview a couple realtors, and hear what their plan is to best market your home. There are companies out there that charge a flat fee and are very cheap, but they do almost zero marketing for your house. It is not to say that there are never situations where this does not work, but I have negotiated deals with these types of companies as a buyer agent and pull from my own experience. When the agent is only making $500 bucks they are not very motivated when it comes to getting you the best price and sinking money into marketing.
At the same time the truth can be said about the top end of the commission. It just comes down to interviewing enough realtors where you feel comfortable with their marketing plan for your home. That is our job.
What others have said about the truth in housing is correct, and that is something you would want to take care of upfront.
Good luck to you! Once you know a reasonable sales price you can expect all you have to do is add the transaction costs of selling to the balance of your mortgage, and the difference between your costs and the sales price is your "equity". When you interview realtors they will do this for you upfront without any obligation to proceed further unless you want to.
First you should have a market analysis done on your home before you make the decision to sell. It will help you determine if you want to sell and set your expectations for the sale price you are willing to take.
In terms of costs, I recommend you use 10% of sales price. Roughly 7% of that will be for actual closings costs, recording fees, title company etc. The other 3% will potentially be needed for the buyer. A majority of the loans are FHA now and a majority of the buyers are asking for 3% closing costs. In fact, many of them need to be able to close.
You will also need a truth-in-housing report for sales in Bloomington. If any repairs are required by the truth-in-housing you will need to pay for those as well or you can have the buyer assume if you do the appropriate paperwork.
I'm available for any questions if you would like to talk.
MN Real Estate Options
Broker/Owner/Short Sale Professional
Accredited Platinum Real Estate Professional
Phone: (952) 443-2056
Fax: (952) 236-6429
Cell: (612) 801-2355
Check out our website at http://www.mnrealestateoptions.com for great information on all aspects of real estate, for Buyers, Sellers and Investors