This depends on a significant number of different factors, but let's make it simple and easy for us to understand! We'll make a list of the most realistic expenses when you sell your own home.
You may want to consider hiring an inspector to walk-through the home and make sure it is safe and sound. This is completely optional but just know that a potential buyer will greatly appreciate the fact that you have taken the time and money to have this done.
Before listing your property it is a good idea to have someone (other than you!) set the home's value. You can have a local Realtor run a CMA for you, and they will usually provide this free of charge.
You may also have an AVM done, and these typically go for around $30. These are the same market value models that lenders have been using for years.
You may wish to have a full appraisal done by a local appraiser. This is your most expensive option, but might also be your best selling tool if the value is close to what you want your home's asking price to be.
ADVERTISING EXPENSES: MLS Service Providers: $500
By now you probably know of the best for sale by owner sites that have MLS service providers to help you list for sale by owner.
Let's assume that for a full-fledged fisbo package it will cost you a flat-fee of about $500.
Website Expenses Strictly optional, but some companies have some great packages that go for around $10 per month.
Local Newspaper, Craigslist, Etc (Print Ads) Craigslist is free, and has a seperate section of folks who list for sale by owner, but posting for sale by owner ads in the local papers will cost you some money.
Let's set aside $100 for generic print ads, although newspapers are currently running some VERY aggressive ad packages since they are sufferingin this economy.
As far as signage is concerned, you can get a for sale sign, for sale by owner flyers, open house signs, etc all for about $150 or less if you do your research and find the best companies to order from.
NEGOTIATION EXPENSES: Once you have an offer, you may want to get the assistance of a real estate attorney for all of your contract work.
Let's assume that you will need a total of 5 hours of the attorney's time, billable at $100 per hour, although if you research you can find attorneys that will facilitate a transaction for less than this!
For this example, let's assume that you have the option of hiring the attorney for $500.
REALTOR FEES: You can generally negotiate these fees.
If you are selling your own home and the buyer purchasing your property is represented by an agent, assume you will have to payout a commission of 2-3% of the sale price of the home.
Again, always remember that this fee is fully negotiable with the agent representing the buyer!
CLOSING EXPENSES: You will want to have a title company handle your side of the closing, and these fees will generally be somewhere around 1 or 1.5% of the sales price of your home.
This fee usually will vary a bit, but expect a 1 to 1.5% for now.
This is an average list of costs of selling a home the 'fisbo' way and should give you a general idea of what you are working with when deciding on how and when to list your home. The biggest expenses for a fisbo, which is typically the real estate commissions and closing costs, can be taken directly out of your proceeds at the closing table.
Luckily the up-front and out-of-pocket expenses are some of the smaller ones and, compared to listing with full representation from a real estate agent, can seem relatively inexpensive when put into perspective.
We all agree, purchasing a home will be, for most of us, the largest purchase you will make in our life. You have found your future home, arranged for financing and are now waiting for the closing date. But to many people's surprise, there are other monies that will need to be disbursed before or on the closing date.
Some of the upfront costs you should plan on paying when purchasing a home include appraisals, inspections, earnest money, lenders fees, title company fees, and attorney fees. It is vital that you plan for these fees ? speak to your real estate professional or your lender who will be able to outline and estimate all of these costs for you. The total cost of these various expenses and fees can run into the thousands and even the tens of thousands of dollars. It pays to be prepared.
You must also be careful of the 100% mortgages or no-money down loans. A no-money down loan does not mean that there aren't any costs associated with the loan. In reality, these types of loans allow the buyer to borrow 100% of the purchase price of the home however the buyer is still responsible for the numerous other costs mentioned above.
You should also keep in mind that you will have to pay a portion if not all of that year's property taxes. Typically, property taxes are called on and required to be paid in full as the home closes. A buyer, upon closing the home, will be called to pay his/her share of the annual bill as it is pro-rated. You may want to enquire about the property taxes of a specific house, or neighborhood, before signing the purchasing contract. Some neighborhood are taxed more heavily than others.
There is however a way of ?avoiding? having to pay some or all of closing costs. As a borrower, you do have the right to ask a seller concession to cover your closing costs and pre-paid items. This makes it so you do not have to come up with any money at all for closing costs.
A seller concession is worked into the purchase agreement and the seller will end up paying for some or all of the closing costs. The seller concession is either a flat fee or a percentage of the loan amount. This is a fairly common practice, particularly in depressed real estate markets.
As for pre-paid items, they generally consist of pre-paid interest and escrows. Many people run into difficulty reading and understanding the multiple costs that are involved with purchasing a home. Because of this, do not take any chances and talk to a loan consultant or mortgage broker. This will help clarify your financial obligations.
Purchasing a home is an exciting adventure. Don't let your fear of the unknown spoil this joyous event. Being prepared and well informed will avoid you being shell-shocked when the time comes to paying the bills. The more informed you are, the better prepared you will be for the many upfront costs associated with buying a home.
Both Sean Patrick & Mira Novosel are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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