This is a real brief article on what you will actually receive from selling your house on the traditional real estate market. Typically most people will list their house with a realtor. The average people will think that if they have a house that is listed for $100,000 and they currently owe $75,000 on their mortgage that they will receive $25,000. Nothing can be furthest from the truth.
Let’s go over the 6 hidden costs of selling your house. This will show you what you can realistically expect to receive after the house is sold. The answer to what you will really receive may surprise you!
#1 Accepted Offer Price
In most market conditions the buyer will often ask for a discount. The discount will vary from market to market. The discount will also depend if it’s a “sellers market” or a “buyers market. On average the discount is 6% off list price. Keeping with the example of a $100,000 list price the average offer that is accepted would be $94,000.
#2 Realtor Commissions
Most people think they have to list their house with a realtors. Realtors perform a valuable service and get exposure for your house on a Multiple Listing Service (MLS), however for this you will generally pay 6%. Usually there are two realtors involved, the listing agent who listed your house and put it on the market and then a buyers agent, who finds the buyer to purchase your house.
#3 Closing Costs
There will be closing costs with selling any property. Usually there are closings costs that the buyer pays and closing costs that the seller pays. This amount can be negotiated, but the average amount of closing costs the seller pays is 6%. Closing costs include title search, taxes, title insurance, title company fees, etc.
#4 Post Inspection Costs
Post inspection costs are costs that are involved with paying for the remediation of whatever the home inspector finds. Most houses in a traditional sale have to have an inspection in order to meet the requirements from the company lending the money to the buyer. FHA, VA, and conventional loans require house inspections. Sometimes what is found in the inspection report must be fixed or else the sale of the house can not move forward. There are houses such as REO (real estate owned or bank owned) properties sell “as is”, but most other sales will typically involve a home inspection.
#5 Other Expenses
There are usually miscellaneous expenses that the home owner does not take into account when selling a house. This maybe involve updating the kitchen or bathrooms, repairing a roof, landscaping, and other misc repair that they have to do in order to sell their house. Often this can be very expensive especially in homes 20 years or older. On average it takes 3% of the list price to get your house to be sold at a fair price.
#6 Net to Seller
How long it takes to sell your house is often not taken into consideration by most sellers. If it takes 4 or 5 or 6 months or even longer, this time is a real cost because the seller still has to pay insurance, taxes, and mortgage(s) during this time. So far, if you added up all the above percentages it will total 21%. Going back to our example of a house that is listed for $100,000 with a mortgage of $75,000 what do you think the seller will expect to get after their house is sold? Originally I mentioned most sellers think they they would walk away with $30,000. After the above adjustments, the seller would really only walk away with $4,000. If you take the $100,000 list minus $21,000 (or 21%) that is needed for the above costs and expenses (realtor commissions, closing costs, repairs, etc.). This means that the seller will get $79,000 for the sale of the house and after the mortgage of $75,000 is deducted, only $4,000 remains and is what is left for the seller. In financial terms you can list this all on a seller net sheet, which would show all the costs and deductions to provide what they would expect to receive after all the dust settles for their house. At closing the seller will receive a HUD settlement statement which provides a line item list for all the costs for both the seller and the buyer.
I hope this article has been helpful. Often it is difficult to look at the real, cold hard numbers but realistic expectations and the right mindset can help the home owner sell their house fast.
In closing, a little bit about Family Guy Buys Houses. We can buy quickly and eliminate the need to pay any out-of-pocket expenses to sell. Our goal is to structure an offer that is a “Win, Win” for both the buyer and seller. We never use high pressure tactics to get you to sell us your house and we will show you the information and figures we use to calculate a fair offer for your property. We’ll Make You An Offer Within 24 Hours.
You Decide If It’s A Fit or Not. It’s That Easy And Stress-Free
Get a quick quote now by going to www.FamilyGuyBuysHouses.com
and entering your property information or by calling us at 407-900-2633.
Call me and if I can’t buy your house, at least I can provide some suggestions that would help – free of charge.
Fred
P.S. The cities we like to buy houses at include Apopka, Altamonte Springs, Casselberry, Chuluota, Debary, Daytona Beach, Deland, Deltona, Eustis, Fern Park, Geneva, Gotha,
Heathrow, Holly Hill, Kissimmee, Lake Mary, Longwood, Maitland, Mt. Dora, Ocoee, Orange City, Orlando, Osteen, Oviedo, Port Orange, Sanford, Sorrento, St. Cloud, Winter Park, Windermere, and Winter Springs.