How does saving $6,000 or even $12,000 dollars sound when selling your home? Maybe to most this sounds crazy it cannot be done because you have been told over the years you cannot sell your own home. Even in today’s internet search you can find information on how to save when selling your home. Some even say you do not need a real estate agent to sell your home just a very good real estate lawyer. I still find people who think it is necessary or mandatory to have a real estate agent. This of course is far from the truth, and many would love for you to stay dumb to the truth that you can sell your home and at the same time save thousands of dollars in the process.
While it is true if you cannot wait to sell your home, and you do not have time to show your home then you are better off with hiring an agent. However, remember you may pay on both ends of the deal. What do I mean by paying on both ends of the deal? Well there is a Listing agent who gets his or her cut and then there is the Selling agent and he or she gets their cut. If the agent lucks out, he or she can be both, gets a really big payoff and this all depends on the selling price of your home. The commission percentage is set at 6% and no more. This fee is typically rolled into the final cost of selling your home (the seller pays the fee most of the time).
If time is on your side, let us say 30 days or more; then try to sell your home yourself. This is something I did when I sold my home in Gulfport Ms after Hurricane Katrina. I purchased the three bedroom, 2 full baths, and two car garage new for $87.000 dollars. I did add a sunroom- 14X50 that was heated and cooled to the back of the house. Since the home was in North Gulfport it had little damage, which I was able to fix before the sell. I sold the home for $120,000 only because the sunroom added value and there were other things I added as well.
So, let us look at this price if I was to sell the home using an agent. For the sake of understanding here let us say I used a seller agent, and the buyer had a different agent. Ok, right off the most I can pay for fees is -6% of the total selling price. Now let us break this down –
- House sales price: $120,000
- Seller agent percentage: 3% (of $120,000) = $3,600
- Buyer agent percentage: 3% (of $120,000) = $3,600 – Remember I am the seller and will have to pay for this in the end. Unless, in the contact the buyer pays his or her 3%, but typically it is the seller who pays for both agents services.
- Total commission percentage: 6% (of $120,000) = $7,200
Here is another example
- Home selling price: $200,000
- Commission percentage: 6%
- Total commission: $12,000
- Listing agent percentage: 3% (of $200,000) = $6,000
- Selling agent percentage: 3% (of $200,000) = $6,000
We could have saved $7,200 in our first example and $12,000 dollars in the second example by selling the home ourselves. There is a big push in the real estate agent’s business to retain their percentage of the sell or buy representation. So, do not be surprised in the next 10 to 15 years we start to see sellers and buyer agents retaining their own representation. Meaning seller agent 6% max commission and buying agent max commission 6%. We can only say greed has a part in this because that would be appalling if this happens.
Here is a list of other items a seller will have to pay for in most states
1. Home inspection – $150.00 to $200 (not always needed)
2. Appraisal – $250 to $300 (bank will want it)
3. Termite inspection – $100
4. Land survey – $400 – $600, but depends on land size and other factors. (Bank will want it)
5. Closing cost / Lawyer fees – $1,500 plus
Here is a list of buyers cost in buying your home
1. 3% buying real estate agent commission, unless the seller has stated in the contract both seller and buyer agent fees will be covered by the seller.
2. Closing cost / Lawyer fees
As we can see it would be better for you to try and sell your home for yourself. You know your home better than anyone, and if you are like me; I have taken great care in making the home a better place for the next owner. The link below is a calculator for finding how much you will pay if using a real estate agent.