Home Selling in New York>Question Details

Michael Gold, Both Buyer and Seller in New York, NY

If I sell on my own I will save on a real estate agent's commission, but what will my other costs be?

Asked by Michael Gold, New York, NY Mon Mar 8, 2010

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Michael,
There are a number of seller costs, and that depends upon whether it is a co-op or condo. The costs are different becasue condos are actually real estate and co-ops are shares in a corporation. Rather than spell it out, it is easily accessed on any of the major real estate company websites.
The gist of what my colleagues are saying at length below is that there are costs to you selling on your own that are beyond the fees you have to pay when you close. All of the benefits of using a professional agent will far outweigh the commission. It is well worth considering the tried and true method of selling your property.

Best,
Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381-4268
http://jenetlevy.halstead.com
0 votes Thank Flag Link Tue Mar 9, 2010
Hi Michael. You didn't mention if you have a Coop or Condo. Here's a general guide to closing costs for Coops.

Co-ops
For the Seller
(Broker: Typically 6%) Not used here.
Own Attorney: Consult your attorney ($1500-$2000 appx)
Co-op Attorney: $450+
Flip Tax: Typically 1% to 3% of price (if applicable)
May also be a flat fee flip tax.
Stock Transfer Tax: $0.05 per share
Move-out Deposit/Fee: Varies by building
NYC Transfer Tax:
Residential:
Up to $500,000 = 1%
$500,000+ = 1.425%
Commercial:
Up to $500,000 = 1.425%
$500,000+ = 2.625%
Admin. Fee:
Non-Deed Transfers (i.e., Co-ops) = $50
Residential Deed Transfers= $75
Commercial Deed Transfers = $165
NY State Transfer Tax: $4 per $1,000 of price
NYS Equalization Fee: $75.00
Pick-up / Payoff Fee: $250-$500
UCC-3 Filing Fee: $100
Miscellaneous Coop Charges: Vary by building

I hope you find this information to be of help. If you change your mind regarding using a broker, feel free to contact me anytime. Regards!

Joseph C. Hastings
Prudential Douglas Elliman Real estate
Cell: 917-579-1502.
2 votes Thank Flag Link Tue Mar 9, 2010
Michael

Here are some additional costs that a seller would pay:
- New York City Real Property Transfer Tax
- New York State Real Property Transfer Tax
- Attorney Fees
- New York State Property Disclosure Fee of $500 if you decide not to complete the form
- You might net a credit or debit for paid/unpaid taxes, water bills, fuel bills that you will settele with the buyer at closing
- What you owe on the Mortgage

The big question would be: Can you get the Best Price without access to all the buyers that Real Estate agents would bring?
Web Reference: Http://ForSaleByDave.com
1 vote Thank Flag Link Sun Mar 14, 2010
Often the perception is money (commission will be saved). When it reality that may be far from the truth. As a Realtor, every personally owned property I have sold has been sold through the multiple listing service with an offer of compensation (commission) to a real estate professional. Why, you may ask. Quite simply because the only way to actually assure HIGHEST and BEST offer is through maximum exposure to the market--and that exposure comes only through the services of the real estate brokerage community! Best Wishes!
1 vote Thank Flag Link Fri Mar 12, 2010
Michael - rather than directing my answer to the "ohmigosh you'll price it wrong, and get far less than any competent (or even incompetent) Realtor might get you"... I think I'll address the actual question you asked.

The other costs you'll incur will be mostly advertising... you'll be responsible for any print ads you might want to run in your local newspaper... maybe you'll make some flyers to put in a flyerbox attached to your sign... you'll need to make signage, and those "pointy signs" pointing to your Open Houses.

Additionally, you'll need to have some good photos... upload those photos to a few good websites... I would strongly recommend that you use a Flat-Fee-Agency of some kind that would get you on the MLS (critical in my opinion)... and that will vary in cost... some FFA's will get you on your MLS for almost free, and some are $300, $500 or $1,0000...

While Joseph's list is good, most of the costs that he outlines, you'll have whether you go hire a Reatlor or go on your own... so most of them aren't "other costs"...
1 vote Thank Flag Link Tue Mar 9, 2010
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Hi Michael, I have a situation in play right now that demonstrates the very points the prior posters are making - I'll share it with you so that you can consider and then act accordingly. First off, what I generally advise my clients who are considering a try on their own is this - give it a shot, but if you are not successful do not dilly dally in changing course and hiring an agent.

The Spring Market has begun - and yesterday was so gorgeous it finally felt as though it was here. But make no mistake, it is already underway. The Spring Market is the healthiest period of any 12 month cycle, this one will be no different. It is when more buyers enter the market and that is good for you, the seller. As in any business, the more interest and competition for product, the better for the seller.

Two other factors are making this Spring Market a particularly opportunistic one for sellers: (1) the extension and expansion of the Tax Credit: as it did in the Fall '09, this is motivating buyers to act. To qualify, a buyer must be under contract by April 30. (2) Borrowing rates remain low. I am of the mind that they will increase over time - where else do they have to go? And when they do, buying power is diminished. You do not want to miss this wave if you are considering a sale in 2010.

As a FSBO, yes you will save on commission, at least half. My suggestion is that from the start you agree to cooperate with agents, agents represent buyers, and you are looking for buyers. If you do this then one of your costs will be half of the customary commission. Don't skimp, if you do, you will disincent agents from involvement. The key to success is proper pricing and maximum exposure. This is where the agent can help you most. Having said that, if you try on your own, the same principles apply. Overprice, you will not sell. Exposure comes from a number of sources - you can use the services of a limited listing service - essenially you pay a flat fee to get on the MLS. That will get you on Realtor.com, Trulia and other sites. You can also post on Craigs LIst and others. Watch the term and terms of anything you sign during the FSBO period, because if you don't succeed you want to be able to redirect, and list with an agent.

Here's why: Very often the desire to maximize bottom line and the lack of market infomation causes sellers to overprice. Buyers who are attracted to FSBOs are often bargain seekers, so regardless of whether you price right or not, they often underbid. Both sides try to calculate the commission savings and take it to "their side" You can see the embedded dichotomy.

So here is my example, client of mine tried and had a contract on her home. Actually the price was fair - under-market for the seller, very fair for the buyer who had essentially negoitated the "net of commission" price. The deal fell through due to continued buyer demands. We listed and now have an accepted contract at a price that after commission will net the seller more than she had negotatied before. The price is a market price - fair to all. The process has been far less stressful for the seller because of my services and support which she will have until close.

So give it a try but be sure you are in the position to list with a broker/agent if you do not succed in short order. The window of opportunity of this Spring Market is just too important to miss.

Best,
Jeanne Feenick
Unwavering Comhttp://www.trulia.com/blog/jeanne_feenick_-_new_jersey/mitment to Service
Read my Blog:
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Tue Mar 9, 2010
You will need a lawyer in the process, and I am happy to prepare a closing cost analysis in advance, at no charge, to show you what you are likely to net. Feel free to contact us at 212.842.0237, or jerry@jerryfeeney.com and note that there is never a charge unless the deal actually closes.
Web Reference: http://www.jerryfeeney.com
0 votes Thank Flag Link Sun Sep 19, 2010
Or if you like, you may submit your property details on nchomevalues.org in order for a free home market evaluation.
0 votes Thank Flag Link Mon Sep 13, 2010
Most often not. Typically sellers that place their home on the market tend to sell there home for less.
If you like, we would be happy to meet to conduct a free home market evaluation.
Web Reference: http://MichaelDvorkin.com
0 votes Thank Flag Link Mon Sep 13, 2010
Michael

Just out of curiosity, since you posted your question back in March, I was wondering how the process went?

- Did you sell on your own, and what were the positive/negative experiences? What mistakes did you make, and what did you get right from the beginning?
- Did you hire an agent, and how did you choose that person?
- Did you find a place to buy, and did you search on your own, or did you work with one agent or many agents?

I always find sellers and buyers feedback educational in how to offer better service to my customers and clients.

Have a Great Labor Day Weekend!

Dave Callaghan
Keller Williams Realty
917-747-5528
David@ForSaleByDave.com
0 votes Thank Flag Link Thu Sep 2, 2010
Hi Michael, I agree with MCC, generallly FSBOs do sell for less than an agent represented sale. I'm here in NJ so the market performance may well be different in NYC, but here I find that FSBO sellers often list their homes too high, essentially over market - and FSBO buyers tend to offer low - essentially under market. The sellers suffer from lack of market info and unrealistic pricing. The buyers are trying to build in the very savings in real estate commission the sellers are trying to capitalize on.

In terms of fees outside of commissions, here in NJ there is a transfer fee (tax) plus attorney fee if you use one. But as an out of state agent, I'll allow my NYC associates to comment more specifically on costs.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service - in New Jersey
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Mon Jul 26, 2010
"Flyer box attached to my sign?" That is very funny. I am talking about a New York City high-rise building.
0 votes Thank Flag Link Sun Jul 25, 2010
I am not an agent. But I believe that if you sell on your own you will sell for less than you will sell for if you use a topnotch real estate agent.
0 votes Thank Flag Link Sun Mar 14, 2010
Most people think that if they sell their home on their own they will save the commission. On average and specially in today's market an experienced agent with good negotiating skills will net you more money than selling on your own. I get approached by buyers to negotiate deals with For sale by owners and 99% of the time i get them a lower price than what they were willing to pay..... with that being said.... your other cost should be around 4-5% of sales price.
0 votes Thank Flag Link Sun Mar 14, 2010
Good luck in selling on your own. The most important thing is to get a good attorney.Make sure you price it right.
Web Reference: http://www.gitabantwal.com
0 votes Thank Flag Link Sun Mar 14, 2010
Hello Michael Gold, There are many reasons in the debate of using a Realtor or not using a Realtor. The right Realtor can save you stress and money depending on his or her experience and ability .

I have been a Brooklyn Realtor for over 20 years and believe I am a true asset to my clients . Here is a link to some information that may help you with you ultimate goal. http://www.brooklynrealestateblog.com/?p=750 . I hope you find this is helpful
0 votes Thank Flag Link Fri Mar 12, 2010
Hi Again Michael. First, thanks to Rockinblu and Alan May for their comments. Yes, what I posted in my answer are closing costs. Obviously some don't impact you (commercial RE fees, etc.) but as I had mentioned,my list was a general breakdown.

Other expenses that you will incur as a FSBO will be marketing costs. These costs, in my opinion are where most FSBO's falter. Some of that expense would be advertisement via flyers, print ads, sinage. If you can find a flat fee service to post on your local MLS, that would be a good approach as well since broker participation can be critical.

Other things would include cleaning your house from top to bottom as appearance matters. That also means clean-up of the grounds to enhance curb appeal. You may even want to paint the interior if needed to give the place a little face lift.

There are many associated costs when it comes to selling your home. You may come to appreciate that brokers do indeed come out of pocket in the marketing of any house. You may want to reconsider and at least talk to a local broker to see what they include in their marketing. Good luck.
0 votes Thank Flag Link Wed Mar 10, 2010
Mr. Gold
All of this Brokers and Agents have given you a lot to think about.
Just think there are some important disadvantages to selling a
home on your own.Selling a home takes Exposure,Time,Cost,
Access and one mistakehowever, could cost a lot of money. If
you like interview some agent that will work for you and earn
their commission.

Fajardo Delacruz
Licensed Real estate Agent
Century Homes Realty Group llc
Direct Line: 347-932-0609
0 votes Thank Flag Link Tue Mar 9, 2010
National Association of Realtors annual stats show that those who sell without the assistance of a Realtor receive 21.68% less for their properties than those who marketed through a Realtor.

The property is yours and is is the choice.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Tue Mar 9, 2010
You cannot discount the potential cost of mis-pricing your home.

Realtors are the best people to give insight to the value of your home and gauging a sales price.

I have seen more then a few FSBO's that have "Given away" their home by mispricing.
0 votes Thank Flag Link Tue Mar 9, 2010
If you choose to sell on your own contact any attorney specializing in real estate beforehand for all related paperwork, he/she can also give you a general idea as to costs. Do use caution when allowing strangers into your home.
0 votes Thank Flag Link Tue Mar 9, 2010
Selling on your own in this market is not the way to go. The only one who will save on the transaction is the buyer because more than likely they will not want to pay you a commission because they know you don't have a realtor. So they will take market value and deduct a commission. Not only that, you wil have less exposure because you can't possibly afford to advertise as much as a real estate professional which will reduce the competition for your property lessening its value again. Hire an agent and save money.

Ralph Windschuh
Certified Buyer Representative
Senior Real Estate Specialist
Associate Broker
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com
0 votes Thank Flag Link Tue Mar 9, 2010
Michael, You can't save what you don't have. Why would a buyer pay you the same for your place as one that is listed, staged and professionally marketed? Buyers who by FSBO's do so to save the commission for themselves. If they save it, then you won't. If you then think, I'll save some, but not all you are now in the realm where professional representation can more than make up the difference and you are protected.
One error in paperwork or proper disclosures can cost you far more than the commission.
To answer the rest of your question, you will pay settlement costs to an attorney or escrow company, title insurance, and any state transfer fees or taxes charged in NY. These are often a percentage of the selling price.
Best of luck, I'd at least suggest you interview a few agents, they can provide an accurate breakdown of all the fees while presenting their services. If you want a referral, let me know.
0 votes Thank Flag Link Tue Mar 9, 2010
Although you might save some money, you could also lose it. What if property values in your area were falling by 1% per month and it were to take you 6 months to sell your property? Although you might end up selling for the same net price, you'd still lose the opportunity to reinvest your profit (if applicable) over that 6 months. Plus, you'd have to come out of pocket for your marketing expenses, and don't forget to account for the amount of time that you'd spend on the marketing (that you could have spent doing other things). Thus, your loss (the actual losses and loss for potential income) are greater than you might have thought.
0 votes Thank Flag Link Mon Mar 8, 2010
One point I also wanted to mention. I don't feel this is the forum to go into specific instances, but I have gotten record breaking prices for former sellers (of course, that was in better market times) but also most recently stopped a seller from accepting an offer they wanted to because I felt I could get them a bit more and did. I also stopped them from giving away some additional demands which saved them thousands on their sale and paid a considerable portion of the commission. Something to consider before you decide to do this yourself.
0 votes Thank Flag Link Mon Mar 8, 2010
Michael:
If you try to sell your apartment yourself, the cost to you will most simply be selling the apartment quicker and for a higher price. The internet is the most important marketing tool available in today's market. As a FSBO you can advertise on the NY Times at a considerable cost to yourself while my company, Corcoran, has 4 million visitors a month looking at our listings which are also advertised on the Times website (at no cost to you) every day from the date listed until the date sold. Our listings also appear on every website that New York's savy buyers look at such as Trulia, Streeteasy, Zillow, Property Shark and a list of others that for sale by owners cannot be shown on. It is estimated that having a broker represent your property results in a higher price paid by at least 7-8% higher than an owner will receive. Add the aggravation of personally showing your apartment without being annoyed by seller's trying to tear it apart to drive your price down, qualifying the buyer so as not to waste your time on a buyer who cannot afford to buy it and being available to show it at times you are not available make it well worth the expense of the broker fees. Keep in mind, if you are not available to show your apartment in the middle of the afternoon, lunchtime or on a buyers timeframe that does not coincide with yours, your apartment is not for sale. They will go and see another place that an agent can show them when they want to see it. Also, when a sale is agreed, if you own a co-op, you better be good at preparing a board package correctly. One mistake on that and the package will be sent back to you and delay your sale. Its better to have a buffer between you and your seller. Actors have agents; musicians have agents; sellers should also have agents. If you would like to speak further about this or have any other questions, feel free to call or email me any time.

Sincerely,

Nancy Brennan
The Corcoran Group
917-568-7701
email: nbrennan@corcoran.com
0 votes Thank Flag Link Mon Mar 8, 2010
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