Considering selling your home? If so, you’ve probably heard that selling your home can be expensive and you might be wondering why. One of our missions at RedefyFlatFee is to help sellers in Hampton Roads better understand the costs associated with the home selling process. In this blog post, we will explain the two major costs you will encounter when selling your home: Commissions and concessions
Commissions
In Hampton Roads, the realtor commission rate has been 6% of the sales price for quite some time. Usually, 3% going to the seller’s agent and 3% going to the buyer’s agent. Now 6% seems fairly reasonable, right? Well, let’s do some math. This 6% is consistent no matter the price of the home. So, if your home is sold for $200,000, $12,000 of that will go to the commission. But, if your home is purchased for $700,000, a whopping $42,000 goes to the commission, that’s a huge difference! Now sellers need to ask themselves, what did the agent do differently to sell the $200,000 home versus the $700,000 home. The answer is probably not much, so why should the amount of commission increase? More importantly, why should you as a seller pay more and lose more of your own equity? The team at RedefyFlatFee realized this practice needed to be changed and decided to break the mold to become a fixed rate realtor. For the flat rate of $5,500, RedefyFlatFee clients receive a full-service real estate agency and are able to save their hard-earned equity.
Our full service includes provides the same support as a regular commission based services including hiring a full photographer, selling services, all of the traditional bells and whistles. The only advertising we do not do is print ads in newspapers. Our experience has shown that in this day and age, print does not sell homes, the internet does and we list our client properties across all of the major websites. With this new model, we save money which equates to our clients saving money. Before listing your home with a standard agency, learn more about RedefyFlatFee’s flat rate fee approach and How it Works.
We should mention this does not include the 3% commission for the buyer’s agent. Though it is not necessary to add this expense we strongly recommend it.
Concessions
Concessions are the second biggest cost a seller may experience when selling their home. When it comes to a buyer purchasing your home, most will take out a mortgage loan that they will pay monthly, but there are a number of fees or “closing costs” that quickly add up and are due on the day they assume ownership. Not all buyers will have the entire amount available at the time of the purchase and may ask for the seller to contribute so that the sale of the home can be completed. Whether your home sale will have concessions or not is usually related to the sales price. The higher the price of the home, the less likely a buyer will ask for concessions because buyers who are interested in high priced homes usually have more money accessible. Some sellers may find offers that include concessions off-putting and feel they should not be required to pay. Our professional advice is to remove the emotional aspect and focus which offer gets you the net profit you were hoping for.
If you plan to sell your home keep in mind that there will be costs associated including commissions and concessions. Understanding these costs will help you prepare for what’s ahead and to find the best solution that fits your needs. Happy selling!
Check out our corresponding Podcast: Why does it cost so much to sell my home?