Selling a home comes with many challenges, and each challenge forces you to adapt. For example, when selling a home, you need to think closely about the costs involved. One of the highest costs that can eat into your profits is the real estate fees.
Who pays real estate fees?
In the vast majority of home sales, the seller will pay the fees. This happens if you use a licensed, professional real estate agent to help you manage the sale. You use their expertise, networking, property knowledge, ability to negotiate contracts, and the like to your advantage. The result, though, is that you have to pay them an agreed commission on the sale of the property.
That might sound useful, but it can end up costing you thousands of dollars. Though negotiable, most real estate agents will not accept anything lower than 4% commission. Some even want 6% and above. These commissions are used to pay staff, manage advertising and office space costs, and more.
You might think the real estate agent is doing a great job and putting the hours in, but now you know why. Sell a house for $200,000, and the realtor could be walking away with upwards of $4,000 in commission!
If more than one agent is involved, the fee is split between the involved parties. So don’t worry, you will not pay an 8% commission because it took two experts to sell your home.
When do I pay real estate agency fees?
Normally, you make the payments at the end of the process, and the home has been sold. Generally, it is recommended to avoid any realtors who look for upfront fees. Home sales fall through all the time, so you should avoid any realtor looking for money for a job they have not yet completed.
Can I pass the real estate fees on to the buyer?
Technically, yes. Many property owners will add on a 4-6% cost – whatever the agreed percentage was – onto the cost of buying the home in the first place. This means that as a seller, you can cover your extra fees, but it means probably charging more than standard market value to achieve this. You are then reliant on a home buyer who is happy to take the property as it is without asking for any changes.
As you no doubt know from your efforts, that is not easy. Homebuyers want to try and haggle, so expect that you will likely not be able to pass on the full cost to your buyer.
Want to avoid paying real estate fees?
The only way to do this is to cut out the middle-man. Either sell directly to a buyer (this can be risky) or sell to a cash buyer. The price you will get is not as good, naturally, but they will pay the commissions and fees, helping you keep more of the price you do get.
If you want to sell your house fast in Salt Lake City, New York, or anywhere else, you should consider bringing in expert help like Favor Home Solutions. This can make it easier, then, to make sure you sell your home without having to worry about the headache of real estate fees.