What Is Your Real Profit After Selling Your Home?
As the seller of a home, how will you know how much profit you make off the sale? There are a number of taxes and fees that get deducted from that price and it’s important to consult your realtor about the final numbers. In this scenario, your realtor will provide you with a worksheet showing all the charges you are responsible for. These charges vary depending on the location of the home, but these are some common fees:
Commissions; real estate agents make a living off commissions they earn from selling a home. This usually sits at around 6% of the sales price. This 6 % is then split between the selling and buying agent’s brokerage. The brokerage then pays the agents
Mortgage management;in the case that you still have a mortgage from the home you are selling there will be a few charges. The first one is called mortgage balance payoff and it is deducted from the sale price of your home. The second is the loan payoff fee, which is an administrative fee once the mortgage or home equity line of credit is paid off. Lastly, there may or may not be a prepayment penalty clause in your mortgage, which is paid once the home is sold.
Work with the buyer; this part all depends on the market in your area, so you may or may not have to cover particular costs for the buyer. The closing cost concession is about 3% of the final sale price. This is added to the final sale price and then returned to the buyer. Buyers may also demand a home warranty, repairs, and termite inspection costs to be covered.
Closing fees; a lien may have been subjected to your property that must be paid before the sale can be finalized. This fee is usually there because of money owed to contractors, court judgements, and property taxes. Recording fees are paid if you owe money on the property you are selling. Notary fees go towards verifying your identity. Escrow fees go towards making sure the money is handled properly between the buyer and seller. Usually the escrow agent receives money from the lender, but this cost can be divided between the buyer and seller. Lastly, title search fees prove you have the legal right to sell the home.