Now that we’ve talked about selling your home from a seller’s perspective, now let’s talk about selling your home from an agents perspective. I thought I’d interview a good realtor friend of mine, Jeanine Boyd, so you can see the agent’s side. Selling your home doesn’t have to be a daunting process if you have the RIGHT agent.
Selling Your Home From An Agents Perspective
Who pays the agent? Do they receive and automatic 3% of the sale of the home?
Jeanine: Commission is always negotiable. In real estate, there are no set commissions. At the time of signing. your listing agreement commission can (and should) be negotiated. The seller pays for both buyer and seller’s agents. The agents can agree to split the commission equally, like 3% to the buyer’s agent and 3% to the seller’s agent or 4% and 2%.
For example, If your home sells for $180,000 and you agree to pay 6%. The agent commission is $10,800 total. That leaves $169,200. However, if you have a mortgage balance of $140,000, you are left with $29,200 before additional costs are added like title insurance, closing costs, etc.
If the home sells for more or less than the price offered the commission remains at 6% unless renegotiated and agreed to by both the agent and the seller.
What other closing costs might sellers have?
Jeanine: Closing costs basically means that the sellers will receive what is called a settlement statement. This statement may include all or some of the following depending on where you live:
- Loan payoff costs
- Transfer taxes or recording fees
- Title insurance
- Attorney’s fee (if you choose to use one)
- Liens or judgments against the property
- Termite inspection.
- It may ALSO include: remediation, unpaid homeowners association dues (if you have an association), prorated property taxes, repairs found during the inspection, and a home warranty (if offered)
If you sell your home before you’ve lived there 2 years, you have to pay taxes on the profit. Is the profit considered the full amount you sold for or is it after you pay the agent commission?
Jeanine: Your gain is the difference between the cost and the sales proceeds. Sales proceeds is the sales price minus the commission, associated closing cost, along with any taxes. Depending on your sales expenses, you may end up with a gain depending on the equity you have in your home. Please be aware that there are some closing costs that are NOT tax deductible. Some examples are:
- Attorney’s Fee
- Recording Fees
- Inspections, just to name a few
Some people think that they can save $$ by selling their home themselves ‘for sale by owner’. They don’t realize the work that the agent puts in. Can you share the advantages of hiring an agent vs. DIY?
( I have heard of more than one person going down this road only to hire an agent later because it was just too much work, not enough showings, etc.)
Jeanine: I would say if you want something done right, hire a professional that specializes in that area of expertise. Do your homework on the person you hire, ask questions, or even ask for referrals from previous clients.
As a licensee, we have access to a larger audience than someone with no experience.
We create marketing strategies specifically for your home. At Weichert, Realtors Select we have a virtual camera for all of our listings, which means it’s interactive. Also, if your home isn’t priced properly it won’t sale. These are just some of the benefits of hiring a licensed agent or broker.
Do you have other home selling tips and tricks that I can share with my audience?
Jeanine: My tips for any seller would be:
- Please keep your home clean and make sure it’s decluttered (less is more). If you are in the process of packing and moving, get a storage unit for those items.
- Price it right, overpriced homes don’t sell
- Ask for comparables in the area, what other homes have sold for that are like yours.
- Please be flexible with showings, you can’t sell a house that no one gets to see.
- If you don’t live in it, stage it based on the current season.
- Lighting is important, bright lights are best.
- Remove personal items.
- Have a positive attitude!
Big thanks to Jeanine for letting me interview her and sharing some tips with the #MoneyChat FAM! You can learn more about her & Weichert Realty here.
Next week’s lesson is all about Caring For Your Home!
What was your home selling experience like? What tips do you have?