Wednesday, February 19, 2014

Breaking It Down: How Much Are Real Estate Transaction Fees?

bellevue homeWhile beginning the home search, many prospective buyers believe that real estate transaction costs are only the 3-6% commission, but the actual cost of selling a home are much higher. To avoid recurring transaction costs, here is a comprehensive estimate of this breakdown:
If you bought a home for $200,000 five years ago, let’s say you put 10% ($20,000) down, and you’re left with a $180,000 mortgage. Now you plan on selling the property for $235,000. Agent commission will likely be 5-6% and cost about $13,000, Escrow costs will be roughly $1,000, title insurance will run $600, and you might want to allot $2,500 for repairs to the home before putting it on the market. The total transaction cost will likely be around 10% of the sale price, and it’s also important to consider the current equity you have on your home which is the difference between $235,000 and your mortgage balance of $180,000. If you take into account what you’re paying in transaction fees, you are eliminating nearly 30% of the equity you had accumulated, which is why ideally it makes sense to hold onto real estate for longer periods of time. If you are interested in selling your Seattle home, contact your local real estate agent for more information today.


Post a Comment