The Seller-Expense Method of Pricing a Property

Reblogger Joe Manausa
Real Estate Agent with Joe Manausa Real Estate 8508880888

This is just too good not to re-blog. Great article from Colleen McConnell.

Original content by Retired Notworking

riding a cow backwards


This strategy involves calculating all the seller's expenses and then basing the price on that, to ensure that the seller makes a profit, or at the very least, breaks even.  This method of pricing is often used by un-informed sellers when there is little or no equity in the home and the seller doesn't want a short sale on their credit and/or can't afford to bring money to closing.  


Typical expenses for sellers include:

  • Brokerage fee for both listing agent and buyer's agent
  • Documentary stamps on the deed
  • Pro-rated property taxes
  • WDO (wood destroying organism) inspection and repairs
  • Mortgage satisfaction and recording fee
  • Payoff of mortgage(s) and equity line(s) of credit
  • Home repairs

Unfortunately for the seller, this strategy probably won't work unless the price developed in this manner is roughly equivalent to or less than market value. 


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