When selling a house who pays for what? The answer to this question is it depends. This is because there is not only one cost associated with a house sale. It is important to note that fees related to real estate transactions can go up to 10% of the houses sale price.
When Selling a House Who Pays for What - Why would a seller pay closing costs?
If you are getting your house ready to sell in 30 days it is important to know who pays for what. Costs paid can be negotiated and may fluctuate in regards to the real estate market. In the following sections, we will explain the different costs that come up when selling a house and who pays for what.
The Real Estate Commission
If you have your selling house closing checklist ready, you know a commision will be given to the agent soon. This one goes on the seller. They can be around 5 to 6% of the house`s sale price. The listing agent normally shares 50% of that amount to the buyer's agent. The first one is the one who receives the money.
For example, for a $200,000 house, the real estate commission should be around $10,000, That being said, the seller's agent should end up with $5,000 and the buyer's agent with the other $5,000. a good option to reduce 3% of the amount paid to the listing agent is to sell via FSBO or for sale by owner. Although selling via FSBO can be very time consuming, the savings had can be advantageous for the seller. Homeowners who are looking forward to selling their homes should offer a commission to the buyer's agent as this will help to attract more potential buyers. Obviously, if buyer's agents don't get a commission for their work, there is little if any incentive for them to offer your home.
One of the things to do when you sell your house is considered the escrow fees. There is a split made when it comes to escrow fees. These are normally, 50% paid by the seller and 50% paid by the buyer. The purpose of escrow fees is to pay for a third party agent that will handle the closing process and funds of the transaction. The cost of escrow fees is normally 1% of the house sale price. For example. for a $200,000 house, these fees would be $1,000. This amount doesn't include the funds that are withheld in the escrow account during the process, it is only destined to pay for the services of the escrow company.
If you are planning to sell your home, you should have a home inspection done. Home inspections are not mandatory. In case, there is a home inspection, the buyer should pay for it. The purpose of these inspections is to recognize if there are any hidden defects in the house. If there are, the house`s value can be negatively affected as there will be a need for reparations. A usual cost for a home inspection ranges from $250 to $700. Some sellers may want to perform a pre-inspection. This is meant to give them an outlook on what an actual home inspection may reveal. This way, they can make the appropriate repairs before listing their home. The pre-inspection cost should be similar to that of the normal home inspection.
Hopefully you now know when selling a house who pays for what. In order to sell your house fast you must know the costs associated. The costs covered are the most important costs when it comes to expenses associated with selling a house. With the information listed above, you will be better off when selling your home in terms of expenses incurred. Just to summarize, commission and escrow fees and costs are split 50/50 between the seller and the buyer and the home inspection should be paid entirely by the buyer.