Hidden Expenses Involved With Selling a House
Selling property in today’s world can be a challenging endeavor on many levels. You want to get the most money possible, you want to sell in a timely manner, and you want to take advantage of any current market conditions which can be used to the sellers advantage but, you may not be in position to do all, if any of these things given your situation. One possibility many sellers tend to overlook is what alternative selling strategies–other than the traditional method of going through a real estate agent–they might be able to utilize which may enhance their ability to better meet their end goals with the sale of their property. Methods which companies that buy houses use on a regular basis to purchase real estate can often times create a more beneficial selling scenario for the seller, and can often times eliminate many of the known, and unknown additional costs a seller might incur during a traditional sale.
When you sell a house in the traditional manner you first and foremost have the agent fees to pay–These fees are always the responsibility of the seller. Some agencies will offer reduced fees to list/sell your Best Marana AZ Realtor property, but unless you are either very lucky or one heck of a negotiator you will generally be paying full commission to the buyers agent. So while you may be able to pull up to a one and one half percent discount from your listing agent you will still be putting out Four and one half, to as much as six percent of your final selling price, just to pay the agent fees. That’s an equivalent to $4,500 to $6,000 for every 100k of value you have in your property. Now that is not coming out of the amount you owe either!! That comes directly out of “your” hard earned equity–of which you may have already lost plenty of in the past five years.
Another cost which will always–again unless you are one heck of a negotiator–be the responsibility of the seller will be all taxes, and HOA fees which are currently unpaid up to the date of the sale. This obviously includes all past due amounts, but it also includes any unpaid current balances, which are not yet due by the date of your statement, but have an amount due since the last time a required payment was made on time. If you pay your taxes or your HOA on any other schedule than in full up front, you may run into these extra costs coming out of your equity. On the bright side this also works in reverse, in that if you are paid out in advance then you would receive a refund of any amounts paid beyond the date of sale. Either way you need to know exactly where you stand with these payments.
Another cost which–especially in today’s economic climate where everyone is looking for “Deal”–you may be asked to pay, would be to cover half or even all of the closing costs. These costs are standardly paid by the buyer, but in a buyers market–when the inventory exceeds demand–buyers will ask for “concessions” –a term to watch out for– of the seller in order to better their purchase. Remember what I said earlier “everyone is looking for a deal” and if you won’t give them one, many feel the next guy will, and they’ll simply walk on your deal to go find another. There is a very high percentage of sellers paying at least half of the closing costs today due to this buyers market mentality. So consider another one percent or more of your equity threatened.
The final unforeseen cost you may also incur is the possibility of having to fix something in order to complete the sale. Again another one of those “Concessions” I spoke of, and again another result of the buyers market mentality, and again, another reason for your potential buyer to walk if you will not meet their requests. Repair concessions can run from something as small as shampooing the carpets to replacing the whole roof, to anything in between. All of which would have to come out of your pocket, and must be deducted from again, your hard earned equity!
6% to the agents, 1+% to closing, Tax and HOA proations, and possible repair costs are all serious selling considerations a seller could face by using the traditional sale method.
When you use one of the many local companies that buy houses they will usually/always eliminate some, if not all of these extra selling costs one might face. It is not uncommon to receive an offer to purchase which reads “Net to Seller”, meaning the buyer is paying all cost associated with the sale and the offer amount is the “Full Amount” the seller will put in their pocket.
Now this does not necessarily mean you will actually keep more of your money by going this way. You must remember these companies that buy houses are in the business to make money–It’s not just for fun. However they are able to use these costs you would normally pay anyway, as their discount off of the fair market value of your property, thus creating the cushion they can use to make their money. So what’s the benefit to the seller then?
The benefits are simple, yet powerful. You get everything laid out in simple English. There are no hidden agendas because if these companies are not fully transparent with their intentions they are leaving themselves open to suit. A suit which would probably put them out of business, and that’s not very good for business now is it! Plus when these companies that buy houses are interested enough to make you an offer, it means they are serious about following through with the terms set forth in the contract, and buying your property. They are Serious Buyers who are far less likely to fail in their delivery of a completed purchase. Their not looking for the next best deal around the corner, their not looking for a reason to back out, their not looking for “Concessions” from the seller. Their offer and their contract to purchase are simple, straight forward, and backed with a serious intent to purchase, without emotion factoring into the equation.
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