With the sales price being so large, few sellers stop to think about ways to minimize the costs of selling their home. Knowing, monitoring and controlling the costs during the escrow process is key to saving thousands of dollars and to receiving larger proceeds from the transaction. Here are costs to understand:
- One of the largest costs is commissions paid to the real estate agents. Commissions vary from 5%-7% of sales price depending on the type of real estate transaction. While a lower commission may seem like a winner, many times you get what you pay for in an agent. With so much riding on the selling price, a real estate agent should bring great service, a solid marketing plan and sharp negotiating skills to the table. Great agents will usually see sales prices 10% higher than average! If your agent is bringing less to the table, beware that you may see a lower sales price.
- With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare before you commit to the company
- Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, and a capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction, but charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating and sharing the cost of these fees with the buyer for your home.
- In any real estate transaction, a home warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Home sellers are requested to pick up the cost of a home warranty for the buyer. However, the cost is negotiable.
- Are you in an area where 1st time home buyers are known to be moving? If so, you may want to prepare yourself for requests to contribute to the buyer’s loan costs. These contributions are generally up to 3% of purchase price or more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.
Do you want to learn more about ways to control your selling costs and get the most money from the sell of your home? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com