Posts Tagged ‘High Real Estate Fee’s’
What Does it Cost to Sell a Home?
Whether or not you use a real estate agent, the process of selling a house will involve certain costs.
Please note that some of the figures used in our examples will vary depending on the state or county a house is sold in, as well as the settlement company used and any other unique provisions that may be contained in a contract of sale. Additionally, the real estate broker commission is typically 6 percent of the sales price, but it is not a set amount. It is a sales expense negotiated between individual sellers and brokers. For the purposes of our example, a $250,000 sales price was used.
Transfer taxes
As you might expect, most state and local governments make sure they profit when someone sells a house. In most states, one-time transfer taxes will be due when a sale takes place. It is customary for transfer taxes to be split 50/50 between the buyer and the seller, but there is no set requirement that they be divided in that manner.
Some states, like Alaska, Idaho, Indiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah and Wyoming, have no transfer taxes at all. In other states, Colorado for instance, the transfer tax is nominal – the state charges only one tenth of 1 percent ($40 on a $400,000 house) in transfer taxes. The so called “Free State” of Maryland falls on the other end of the spectrum with some of the highest transfer taxes in the nation.
Commissions
As we stated earlier, real estate commissions are not a set amount. They are a point of negotiation between the seller and the broker. For illustration purposes here, we are using 6 percent, or $15,000 on a $250,000 sale.
Another seller expense you may run across in some area’s is a listing broker administrative brokerage commission. It’s usually adds another $250-$500 expense on top of the 6 percent commission fee. The seller will see it as a separate expense on their closing statement. So, what is this fee for? By law, brokers must keep records of all their real estate transactions for a period of years. And they must produce those records if asked for them. Although it’s a ridiculous added on fee, the listing broker administrative brokerage commission is an expense passed along by some brokers to help defray the cost of this requirement.
Settlement fees
The buyer is responsible for hiring the settlement or title company to perform closing, so the buyer will usually pay most of the fees associated with settlement. But, the seller does have some settlement expense. If the seller has an outstanding loan on the property, the settlement company will take care of paying that loan off out of the sales proceeds. They’ll charge something for the service, plus the cost of overnight fees to quickly get the loan payoff to the mortgage holder. In our example here, we’ll use $250. And, since interest in collected in arrears, the seller will be responsible for any interest charges that accrue after the last payment thru the day of closing.
The Bottom Line
If you sell your house for $250,000, you can probably expect to walk away with around $230,000 after taxes, commissions and fees. If no real estate commissions need to be paid out, the seller could expect to walk away with approximately $245,000. The real number will depend on exactly what it says in the sales contract and where the property is located.
Thank you for visiting Why6Percent.com. We help do-it-yourself home sellers market their home to millions of home shoppers every day. We can help you get the word out about your home, too!!
Hamptons Real Estate Brokers Under Investigation for High Fee’s
May 19, 2010, 12:57 pm
Hamptons Listings Said to Be Under Investigation
If Wall Street denizens thought they could escape the specter of Justice Department inquiries by decamping to the Hamptons, it appears they’re wrong.
Real estate listings in the Hamptons are the subject of a Justice Department inquiry, The New York Times and Bloomberg News reported Wednesday, keying off an earlier article in The New York Post.
Several Hamptons real estate executives told The Times on Tuesday that they had been contacted by Justice Department officials seeking information about a listing service that has been criticized as an effort to keep smaller agencies from having access to the area’s best properties.
The service, known as Realnet, allows members to share their listings with other members. Last year, George Simpson, who runs his own real estate listing company, sued more than two dozen local brokerages and Realnet. Mr. Simpson said that because only larger brokerages could afford the annual fee, which he said ranged from $15,000 to $50,000, those brokerages ultimately controlled “80 percent to 90 percent of the exclusive real estate listings.”
The stakes for brokerages are big, and apparently getting bigger, according to Bloomberg:
Hamptons home sales more than doubled in the first quarter, the biggest annual increase in seven years of record keeping, according an April 22 report by New York-based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. A shift toward larger, more expensive homes pushed the median price up 35 percent to $908,500.
Three brokerages named in the lawsuit — the Corcoran Group, Brown Harris Stevens and Prudential Douglas Elliman — declined to comment or did not return calls, The Times said. Realnet did not return a call and an e-mail message seeking comment.
“The question I think the Justice Department is asking is: Are they putting their own profits ahead of what they should be doing for the clients?” Jonathan Lerner, a managing director at the Engel & Volker brokerage, told Bloomberg.
Gina Talamona, a spokeswoman for the Justice Department, also declined to comment about the inquiry to The Times and Bloomberg.
By August, Mr. Simpson had withdrawn his lawsuit and said that he planned to refile his case under “different circumstances” and continue “moving forward with the crusade.”
But the original case apparently caught the attention of Justice Department officials. Mr. Simpson told The Times that in the past month, he spoke for 90 minutes by telephone with several department employees about the structure of the real estate industry in the Hamptons and which firms dominated the market.
Members of a multiple listing service post their sales listings for other members to see; nonmembers could be at a disadvantage because sellers generally prefer to have their homes placed on listing services and exposed to as many potential buyers as possible.
John Nickles, a broker based in Southold and the chairman of the multiple listing service for the Hamptons and North Fork Realtors Association, told The Times that he was interviewed on May 5 by two Justice Department lawyers, an economist and a paralegal. Mr. Nickles said that his brokerage could not afford the more expensive system; he pays $160 a month for access to the local multiple listing service that he leads.
Joe Kazickas, owner of an East Hampton real estate company that runs a Web site called Hamptonsrentals.com, said he was scheduled to speak to Justice Department officials on May 24. He said that smaller brokerages that could not pay for the costlier listing database would find it “very difficult to compete.”
Source New York Times, Edited by Andrew Ross Sorkin
Thank you for visiting Why6Percent.com. Our job is keeping you informed and helping you market your home. If you do not have a listing on your local MLS or Realtor.com, you are missing millions of home shoppers each month. Visit our site or call 1-800-381-9496 for details!