Did you know that home sellers can pay around 10% of their home’s sale price in commissions and fees? That means that on a $500,000 home sale, the seller could end up paying around $50,000 just to sell the house – and that’s not including repairs and other costs of selling a home.
Wait… what? Yup, you read that right! With preparation costs like repairs, inspections, appraisal fees, agent commissions and closing costs — the cost to sell a home adds up quickly. It’s important to know how to calculate agent commissions and fees so you know how much real estate professionals actually make off of your hard-earned home equity.
What you thought was going to be a payday turns out to be quite expensive. Some of the costs will come out of the sale, but you will need a certain amount of money upfront for the repairs and other preparatory costs. Here’s how to calculate the costs of selling a home.
How to Calculate Realtor® Commission
Perhaps the largest cost you can expect is the real estate agent commission. Thankfully, the money for this comes out of the transaction, so as long as you’re making enough of a profit on the sale, you shouldn’t have to pay out of pocket.
However, you will have to give up a healthy portion of the sale’s proceeds.
Real estate agent commission can be negotiated – but it is typically 6% of the home’s selling price. The seller typically pays the entire amount, although this is also something that can be negotiated. The commission is split between the seller agent and the buyer agent — everybody gets a cut for their part in helping you to sell your house.
What does that look like in numbers? It will depend on the sale price of your home, but for a $200,000 home expect to pay around $12,000 just in commission!
Home Seller Closing Fees
The seller will also typically be responsible for a handful of other fees. Depending on the property’s location you may have to pay transfer taxes. The state transfer tax for Virginia is $0.50 for every $500 with an additional deed tax of $0.25 for every $100. The local municipality may also charge a tax. North Carolina charges $1 for every $500 and 7 counties can charge up to 1% additional tax.
You’ll also have to pay a portion of the property taxes to cover your responsibility for the part of the year that you owned the home. If you are part of an HOA, you’ll be responsible for those prorated fees as well.
On top of that, you’ll need to take out a title insurance policy to protect both you and the buyer if there is a problem with the title. You may also be responsible to pay attorney fees. Market traditions vary depending on your location, though both Virginia and North Carolina require an attorney to be present. Who pays can also vary and is negotiable.
Home selling cost calculator
The Cost of Selling a Home
As you can see, the costs of selling a home mount quickly. Wouldn’t you love a less expensive, hassle-free way to sell your home? That’s what we’re all about here at Quick Fix Real Estate. We cut out all the rigamarole of using real estate agents and waiting for financing. Just sell your house fast without the headache — and without a big bill.
Pay nothing out of pocket, and get your fair cash offer today.