When selling a home, what costs are involved? i.e. commission, closing costs, etc.?

Asked by Mark, Carmichael, CA Fri Aug 28, 2009

Help the community by answering this question:

+ web reference
Web reference:

Answers

2
Sue Archer R…, Agent, Palm Harbor, FL
Sat Aug 29, 2009
As Tim had said, your listing agent can give you an estimated net sheet which would show what fees are likely to be. It is really all dependent on the price/terms of the offer that is provided by the buyer and accepted by you.

Some of the elements are:
Loan fees- to get out of the loan, you need to pay interest up to the point that the escrow closes. Often they will also charge you a $100 reconveyance fee. That is depending on the bank. If you have a second loan, you calculate in the same projection of what you owe prior to the sale closing, including a reconveyance fee.
Title fees- to provide a clear title to the property, and escrow fees to execute the contract. These prices are set relating to the sales price of the home so they will change as the sales price changes. These are also negotiable as to how they're paid: by the seller, by the buyer, or 50-50. In today's market it's pretty common tht the buyer asks the seller to pay these costs.
Commissions- Seller pays commissions. While this number is negotiable, there is a reasonable range by which it makes sense for realtors to accept the listing and some that are not. The commission is split in some fashion between listing agent and the buyer's agent, and normally specified in the listing agreement.
Transfer fees- is set at $1.10 per $1,000 of the purchase price. This again can be negotiated with the buyer but most often, in today's market, the buyer will ask the seller to pay these.
Outstanding fees- any taxes owed, utilities owed, or any other liens against the property will be settled as payments as part of the transfer of title to the new owner. These are the responsibility of the seller.
Credit to buyer- In today's market, the buyer may also ask for a credit to help cover their loan closing costs. A typical request is a '3% credit towards buyer's recurring and non recurring closing costs'. In some cases, the buyer will raise their price above what they would have offered so that they can 'finance' their closing costs and come in with less money down for the purchase.

Again, all of this is negotiable, but the net sheet helps you manage the 'what if' s of considering certain price offers, with differing terms. The seller makes their decision based on the bottom line net that they would receive.

Now in a short sale, where the seller owes more than what the property is worth, they are making a hardship case to their lender to accept less than what is owed to them, but also to absorb all closing costs defined in the seller's net sheet. In essence, the seller will receive no returns, and the lender is absorbing all the costs outlined above.
Web Reference:  http://www.suearcher.com
0 votes
Tim Hobbs, , Sacramento County, CA
Fri Aug 28, 2009
By law commissions are negotiable between the principal (you) and the broker. You then have closing costs such as prorated property taxes, escrow fees, transfer tax etc. Then you have the terms of your purchase agreement with the prospective buyer which may or may not have you paying for items beyond usual and customary or providing a credit in the case of a buyers FHA loan. Then you have costs that may occur after inspections and the buyer wants certain items repaired or corrected. This may be paid directly by you before close of escrow or you may simply provide a credit to the buyer (in effect a price reduction). As a general rule, commissions and escrow fees are about 8-9% but of course can vary. If you work with an agent they can provide you with a projected net sheet. Good luck.
0 votes
Search Advice
Search
Ask our community a question
Home Selling in Carmichael Zip Codes

Email me when…

Learn more