Before listing your home on the real estate market, you may want to consider learning more about listing fees and the process it takes to list a house on the market.
All you need to know about listing fees
You’re likely to have started your search for a home on the internet, browsing websites and apps that allow you to list it. Most buyers and sellers eventually turn to a Realtor for help in buying or selling the home of their dreams. Why not first consult a Realtor? In many cases, the short answer is listing fees.
Listing fees or brokerage commissions are additional costs that you should consider when selling or buying a home. It is important to understand the impact of listing fees on your sale. Let’s dig in.
Listing Fee Basics
A Realtor will charge the seller a commission fee of 6% based on the selling price. The Realtor is paid a 6% commission fee. This fee is based on the selling price of the home. Do you find the 6% fee to be excessive? Depending on where you live, the listing fee may rise to 10% in some areas. Sellers who cannot part with this portion of the sale have other options.
You can also find discount real estate brokers in a real estate market.
A discount real estate broker uses the internet to connect sellers with agents willing to accept lower rates, usually in exchange for a larger volume of clients. The level of savings and the payment structure you can expect as a seller will depend on which brokerage you choose.
Flat fee brokers may not include inspection and closing procedures. Be sure to determine two things: 1) How much you are willing to pay for a listing fee when you sell your house, and 2) What services you expect from a Realtor. Are you looking for a sale or legal assistance? After you have outlined the basics of your listing fees, you can start the listing process.
What is the location of the home listing fee?
Are you curious about where your listing fee goes? Surprised to find out that the fee does not go directly to the agent. It’s split between the buyer’s and seller’s agents.
Although the breakdown may vary, the average fee split between agents is 50/50. A large portion of the fee is paid to the companies by the agents to pay for advertising and overhead costs. An agent might take away 1.5% of the selling prices for commission and salary.
There is no guarantee that a fee will be paid
Remember that enlisting the services of a Realtor is not a guarantee that your home will sell. A Realtor can’t guarantee a sale despite their years of experience. They also cannot guarantee the selling price.
It is important to consider whether a listing fee is worthwhile. B. Douglas Bernheim, a Stanford economist and Jonathan Meer (a Stanford grad researcher), presented a case study.
“Historically, residential real estate brokers have received sales commissions of nearly 6% of the closing price for a home. Are these commissions justified? This question is addressed using unique data about sales of Stanford University faculty and staff homes. There is no evidence to suggest that a broker will increase average selling prices or alter the average initial asking price. Brokers do help people sell their homes faster.
The listing fee does not guarantee your home will sell. It is important to weigh the benefits and costs. A Realtor can be a valuable asset if you want to quickly sell your home. If you decide to go this route, we suggest these tips for reducing listing fees without sacrificing any benefits.
Tips to Reduce Listing Fees
Although discount brokers offer lower commission rates for sellers, their fee structures and range of services can vary.
In recent years, a discount broker promises to sell your house for significantly lower fees. Understanding the nuances of what a discount brokerage agent can offer you will help you decide if this is the right path for you and your house.
Take your time. Do not settle for the first person you meet. Be sure to shop around. To get an idea of the selling and marketing strategies of each agent, interview multiple agents so you can identify one who suits your needs and fits your timeframe.
Keep waiting for a better sale. You can raise the asking price to increase the profit. Freakonomics experts say that waiting for a week or less can increase your asking price by $10,000. Sellers can take advantage of this price cushion to cover the fee.
