You have decided to list for sale by owner, or 'fisbo', as some people call it. You'll want to know what the list of costs of selling a home might actually be.
This depends on a significant number of different factors, but let's make it simple and easy for us to understand! We'll jot down a list of the most important expenses when you sell your house.
PRE-LISTING EXPENSES: Inspection Report: $200-$300 (optional)
You may want to consider hiring an inspector to walk-through the home and make sure it is safe and sound. An inspection is obviously an optional step but generally speaking someone who is looking to purchase your home would take notice of the fact that you have gone the extra mile to have this completed.
CMA (competitive market analysis), AVM (automated valuation model) or Appraisal: $0-$350
Before listing your property it is a good idea to have someone (other than you!) set the home's value. You can have a local Realtor run a CMA for you, and they will usually provide this free of charge.
Another option is, for arond $30, you can get an AVM on your property. Lenders tend to use these valuation methods when they underwrite their loans.
You may wish to have a full appraisal done by a local appraiser. This is your most expensive option, but might also be your best selling tool if the value is close to what you want your home's asking price to be.
ADVERTISING EXPENSES: MLS Service Providers: $500
By now you probably know of the best for sale by owner sites that have MLS service providers to help you list for sale by owner.
Let's assume that for a full-fledged fisbo package it will cost you a flat-fee of about $500.
Website Expenses Completely optional, but you may find that some providers have pretty effective programs starting around $7 a month.
Local Newspaper, Craigslist, Etc (Print Ads) Craigslist is free, and has a seperate section of folks who list for sale by owner, but posting for sale by owner ads in the local papers will cost you some money.
Let's set aside $100 for generic print ads, although newspapers are currently running some VERY aggressive ad packages since they are sufferingin this economy.
As far as signage is concerned, you can get a for sale sign, for sale by owner flyers, open house signs, etc all for about $150 or less if you do your research and find the best companies to order from.
NEGOTIATION EXPENSES: Once you have an offer, you may want to get the assistance of a real estate attorney for all of your contract work.
Let's assume that you will need a total of 5 hours of the attorney's time, billable at $100 per hour, although if you research you can find attorneys that will facilitate a transaction for less than this!
For this example, let's assume that you have the option of hiring the attorney for $500.
REALTOR FEES: You can generally negotiate these fees.
If you are selling your own home and the buyer purchasing your property is represented by an agent, assume you will have to payout a commission of 2-3% of the sale price of the home.
Again, always remember that this fee is fully negotiable with the agent representing the buyer!
CLOSING EXPENSES: You will want to have a title company handle your side of the closing, and these fees will generally be somewhere around 1 or 1.5% of the sales price of your home.
Please note that this is a fixed fee and varies slightly, but consider an average of 1-1.5% for now.
This is an average list of costs of selling a home the 'fisbo' way and should give you a general idea of what you are working with when deciding on how and when to list your home. A fisbo will most likely incur expenses for the closing costs and Realtor fees, but these are usually taken out at the time of closing.
Luckily the up-front and out-of-pocket expenses are some of the smaller ones and, compared to listing with full representation from a real estate agent, can seem relatively inexpensive when put into perspective.
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