Research Fees Before You Buy or Sell A Home

Buying or selling a home comes with a long list of fees. Understanding what these fees are and what you can negotiate can make a difference to your wallet. Experts explain what you need to know so you can lower these fees.

This will affect your bottom line, says Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. Every seller wants to know, after they sell their house, what they will have left or what they need to bring to the closing table, while a buyer needs to get a grip on how much money they need to bring to closing. This factors into what you can afford.

Fees for buyers and sellers are different by state, and who pays which fee follows local custom. Closing costs for buyers are driven by the mortgage amount, says Ameer, while a sellers fees are determined by the sales price and any debts to be repaid from the proceeds.

Experts suggest asking about fees early in the process, since theres little bargaining power at the last hour. One of the biggest mistake people make when theyre buying or selling [a home] is to wait until the last moment to review the estimated closing cost statement, which spells out every fee for the buyer and seller, and itemizes where each of the fees are directed and what theyre for, says Michael Corbett, Trulia's real estate expert.

Be sure to ask for an estimated closing cost statement a few times during the process, starting with when youve opened escrow. Also, title companies, escrow companies, lawyers and banks may give you discounts. Being an educated buyer or seller is your best savings plan when it comes to knocking down fees, says Corbett.

Once a seller chooses a real estate agent, they will enter into a listing contract with that agent. The contract will state certain fees, like the real estate commission, and will say whos responsible for title insurance, home inspections, roof inspections and the transfer tax, says Zackary Wright, Senior Vice President at Christies International Real Estate. Taxes cant be negotiated, but experts explain those fees that can and give tips for what to look for.

Commissions

The real estate commission is the biggest fee youll pay when selling a home. By law, these are negotiable and there is no going rate, says Ameer. These vary by marketplace and the homes price point. Lower priced homes may have a higher commission rate, but commissions for higher-priced homes can be larger chunks of money.

Ameer suggests asking the agent to look through the multiple listing service (MLS) so you know the commissions for similar priced homes in your area. You dont want to be misguided and offer a lower commission, she says. Offering a competitive commission will help your home get shown to potential buyers.

Thinking that youll save money if you go it alone is a fee myth, says Corbett. When you try to sell a home on your own, youll likely sell it for less, carry the home for longer and still pay the commission when you end up going to the real estate agent in the end. An agent helps negotiate the deal and solves problems that can arise for either the seller or buyer. According to the National Association of Realtors, homes sold by owners sold for $184,000 as compared to $230,000 for those sold with an agent.

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Research Fees Before You Buy or Sell A Home