How Much Will it Cost to Sell My Home

There is Cost, There is Value, There are Unearned Fees, Then There is Transparency.

Do you want money? Sure we all do. When you are selling the biggest investment you’ve made in your life, whether you are a first time buyer, a savvy investor with a real estate empire or something in between the only way to master the negotiations, maximize your ROI or meet your real estate goals is to understand the net you will get and the costs associated with selling your home.

Costs Paid at Closing / Fixed Costs

Each state is a little different, I will cover the costs for Michigan because that is where I have my real estate practice. Michigan has a “Real Estate Transfer Tax” of $4.30 per $500. This is taken out of the sellers proceeds at the time of closing, and is non-negotiable. Everything else is negotiable.

In our contract a seller agrees to provide clear title to the Real Estate being sold, the best way to do this is to furnish a owners title policy. A seller can choose whichever title company they would like to provide title services which include an owners policy of title insurance, closing services, deed prep and transaction management.

Title insurance is based on the sales price, or the insured price and strangely is close to the price of the transfer tax. Title companies charge about $100 for deed prep and around $300 for closing services. They prepare all the settlement docs, help coordinate the closing, cut checks and wire money.

Inspections and Repairs

In Michigan it is a standard of practice that the sellers provide a pest inspection. There are several companies that provide this service and typical pests around these parts are termites, carpeter ants and carpenter bees. This inspection is between $50-$80. If infestation is found sellers can choose to treat, as they usually do the cost is between $800-$1400 with a one or three year guarantee.

Buyer inspections are paid by the buyer. Because if the sellers did it would say “Everything is Perfect.” Now the buyers may hire a professional inspector, or a contractor or even a strange uncle to come in and find out what wrong with the home. Now the purpose of the inspections as stated in the real estate contracts is to find latent defects that the buyer could not see at the time of viewing the home, but some buyers will use it as a chance to renegotiate the price or ask for costly repairs.

Now If I have done my job, marketed your property to the max we probably have backup offers, so the buyer would have no leverage. So the buyer can ask for repairs or money off the price, we can and should say no in most situations, however there are exceptions. Sometimes a lender may require repairs to close the loan and we can figure out the best way to address that, or we may discover safety issues.

Buyers Closing Costs

In our market, homes that have sold at the median sales price that had financing, sold with buyers closing costs approximately 50% of the time. It very common and it important to understand what they are and how the affect the sellers net.

Buyers have a lot of costs associated with buying a home. They have a downpayment, they have to pay loan origination fees, appraisal fees, points, pre-paids, insurance premiums, utility deposits, moving costs, maybe they need appliances, furniture, paint, buyers like to keep a little bit of change in their pocket so they ask the seller to credit them back a certain amount of money at closing to off set these costs. This is something we can discuss when we negotiate the offer. We can include it as a fixed cost to the seller on the net sheet and account for it. It does not in any way affect the ability of a buyer to perform and is limited by the lender and the mortgage product they are getting.

Unearned Fees

We treat unearned fees like Seven Up- never had them never will. But In a recent survey of our venerable colleagues in Southwest Michigan we are the only one who does not charge an additional fee at closing. “Admin Fees” “Technology Fees”, “Office Fees” are very common often undisclosed, mostly unearned and range between $200-$1000 a tthe time of closing in addition to the brokerage fee.

Brokerage Fee

Everything changed recently with the “NAR Settlement.” We have always emphasized the fact that everything is negotiable and the brokerage fee is 100% negotiable. We recommend offering a portion of the brokerage fee to co-operating brokers to find a buyer for your property, and we offer discounts if we find the buyer. We hope to provide a premium experience without the premium costs.

Everything is Transparent

While many of these fee can vary and are negotiable, one thing is certain, we value transparency, we want the seller to understand what they can expect to net so they can negotiate properly, because money is important but there are many other terms that can affect the sale of a property and the close of escrow and its our job to provide guidance and insight all the way through the process.