How much does it cost to sell my home?

A common question for any seller is:

What is your fee?

What do you charge?

How much is your commission?

How much does your company charge?

What is the selling fee?

Will you discount your fee?

This other company said they would sell if for less!

A real estate company fee varies from state to state and even company to company. The typical fee depending on the area you are in and real estate company is 6%. What does that really mean? It means 6% of the selling price of the home.

This is commonly known. What isn’t commonly known is how the commission at a real estate company gets broken down. In my real estate experience this is how it typically works.

The listing agreement is between the seller and the real estate firm or brokerage. The brokerage/Principal Broker has ownership of the listing once the agreement is signed between the seller and the listing firm.

The real estate firm pays their listing agent a portion of the 6%. The listing firms keeps 3% and the listing agent gets a portion of the 3% depending on the agreement the listing agent has with the broker/firm. For example: if the listing agent has a 70/30 split with the company, the agent will receive 70% of the 3% that is paid to the company from the home sale. The other 3% goes to the buyer’s agent firm, their firm splits the 3% with them according to their agreed split.

This question of how much is different depending on the agent, their firm and the agreement a seller makes with the firm. The above example is just one example of many different ways the fee could be split.

The misconception is that the listing agent receives all 6% of the sales price of the home. This is not the case at all!

Let’s break down a $100,000 home for example:

Firm and seller agree on 6% commission once the home sells. The homes sells for $100,000. The listing firm receives $6,000. The buyer’s agent is from another firm who brought the buyer to the listing. The buyer’s agent firm receives $3,000 and the listing firm receives $3000. Let’s say in this case that both the listing agent and buyer’s agent at their respective firms each have a 70/30 split. Each agent would receive $2100 each. This is only if the real estate firms do not have any other fees they charge their agent. In most cases they do. Fees such as E&O, desk fees, transaction fees, marketing fees, signs fees etc…(typical transaction fee is $300). This would come out before the agent received his/her commission check. In this particular case the agents would be receiving around $1800 apiece.

The commission from state to state varies.

The commission can be negotiated in some cases.

The commission is not always 6%.

When a firm or company has a really low fee such as 1% or 2% make sure you ask what their marketing plan is for your home. Most of the time it is only adding it to the MLS and placing a sign in the yard. There is much more to marketing and selling a home than those two things.

Cheaper is not always better!

Find a trusted Realtor that has a great marketing plan in place.

Make sure you interview more than one.

You get what you pay for is a true statement in this business.

Listing vs. selling on your own puts more money in your pocket at the end of the day.

Be aware of asking for a discounted commission, this could mean dropping services that would have normally been provided to you.

The commission is only one part of the cost in selling your home. The title company will have title fees. This varies depending on what title company you use. There could be requested repairs by the buyer ,seller concessions such as paying a buyer’s closing costs, or a home warranty etc…

Make sure your real estate agent sends you a seller net sheet to show your net proceeds after all closing costs and fees.