When it comes time to sell your home, many owners only imagine the dollars lining their pocket. While Outer Banks home sales have had a good year so far, it pays to be prepared for how much it may cost and set your expectations from the beginning.
Traditionally, the seller pays the agent fees. There are two sides to this coin, the listing agent and the buyer’s agent. The going rate in the Outer Banks is typically 6%; split between the buyer’s agent and selling agent. The average Outer Banks home is around $400k and agent’s commission could total $24,000!
At Eillu, we have a lower listing fee at 1.5% and have capped this at $15,000 for properties where the sale price is $300,000 or more. Sellers should keep a 3% commission for the buyer’s agent to maintain your listings appeal when compared to other listings and to encourage buyer’s agents to share your listing with their buyers. Listing with Eillu will still save you significant money. Take the average Outer Banks home at $400k; $6,000 would be the listing agent commission (at 1.5%) plus $12,000 to the buyer’s agent. This commission structure saves the seller $6,000.
Many times the buyer’s agent and listing agent represent different firms and have to share a portion of the commission they earn with the Brokerage Agency to cover overhead and other costs.
Most agents do not receive a salary. The listing agent pays upfront for all the costs to market your home. Everything from the monthly MLS fees (multiple listing service), for sale signs, professional photographs and drone videos are paid upfront by the listing agent. If your home does not sell then the agent is not reimbursed for his out of pocket expenses. At Eillu, we provide additional marketing and services that some higher commission agencies do not provide.
Typically, home buyers pay more than sellers in closing costs. However, that doesn’t mean that sellers don’t pay any closing costs. Plus, in a buyers’ market, a buyer may negotiate with the seller to pay a portion of the buyers closing costs in order to seal the deal.
Sellers closing cost include transfer taxes. In Dare and Currituck County the transfer tax is $1 per $100 in sale price or $4,000 for the $400k home. Sellers should also expect to pay prorated water bills, prorated property taxes, prorated amount of HOA (home owner association fees) due, any special assessments for HOA, any outstanding invoices for repairs, current mortgage payoff, payoff of any liens against the property, document fee for deed and lien waiver, and attorney fees.
Benefits of an Agent
Many home owners attempt to sell their home as a FSBO (For Sale by Owner) when it is a sellers’ market and believe they will save money. The reality is actually quite different. According to the National Association of Realtors 2016 profile the average FSBO sale prices was $185k while a home represented by an agent was $245k. The $60,000 difference more than offsets all agent commissions.
The listing agent does so much more than getting you more dollars from your sale. From properly pricing your home, marketing, scheduling appointments, hosting open houses, negotiating offers and more, your agent will save you time. The agents’ knowledge and experience will prove invaluable should any hiccup occur during the selling process or negotiation. Your listing agent has the correct disclosure forms and process in place to make sure you comply with all legal requirements.
If you do go the FSBO route, you will have to pay the fees to list on the MLS, hire a professional photographer and drone videographer, pay for “for sale” signs, pay to list on FSBO or other websites. You will need to prepare the marketing materials, brochures, website listing and social media postings to market your home. Most people do not have the skills or the time to perform all the activities and tasks required to properly market their home. A FSBO seller can’t match the reach that agents obtain through IDX (Internet Data Exchange) and syndication of listings; Eillu’s listings reach over 700 sites.
Very few of us live in glass houses that are in mint condition and ready to show. Taking the time and money to complete any small repairs will be rewarded with a quicker and higher dollar sale. The loose door knob for a room you seldom enter may not bother you but will sure to be noted by a potential buyer or inspector. These small items can turn buyers off and may make them assume your home has not been well maintained. Critically examine your home for any small items that need to be addressed. Make sure any landscaping items, like removing dead trees and keeping the grass cut are also taken care of.
Some sellers go an extra step and employ an inspector to make suggestions of any repairs that are needed. Sellers can make the repairs and make the report available to buyers once the home is on the market. An inspection report provided by the seller can boost buyers confidence in the condition of your home.
Your home should be spotlessly clean, polished, staged and ready before the first buyer ever walks through the door. Most of us do not lead minimalist lives and have accumulated a lot of stuff. While the stuff may be important to you and inspire fond memories, it will be distracting to buyers. Family photos, travel mementos, collections and knick knacks should be removed. Many sellers also have too much furniture as well. For this reason, pack it up and store it offsite. Alternatively, you can also donate or have a garage sale to dispose of unwanted items or items not needed in your next home. This will make moving much easier. You want to make it as easy as possible for the buyer to see the features of your home and allow them to imagine their belongings residing there. Your listing agent can advise you with ideas to properly stage your home or you can consult with a stager or interior decorator.
Occupied or Vacant
If you are not living in the home or it is a vacation rental, you must keep all the utilities (gas, water, electric) on to show the home and facilitate inspections. Many vacation homes are sold with furnishings and have fewer personal mementos. Remove any items that are not included with the sale prior to putting it on the market. If you have already moved from the home and it is vacant but it was your primary residence, check with your insurance agent to see if you require additional coverage.
Most of the sellers’ costs are deducted from the gains from the sale at closing. However, if your gain from the sale is more than $250k (single) or $500k (married filing jointly) then you may need to pay capital gain taxes on the sale. You can read more about it in our post: Don’t Let Real Estate Capital Gains Take Your Profit. Consult with your accountant regarding your particular circumstances. Taxes are paid the year following the sale of the real estate.
The Eillu team has decades of experience selling real estate on the Outer Banks and have insight to structure 1031 exchanges and more complicated deals. Schedule an appointment today to learn how to maximize the profit on the sale of your home with our low real estate listing commission.