When most people think of fees and charges relative to a home sale, they are thinking of monies a buyer has to bring to closing. Title fees, lender fees, attorney bills and appraisal charges come to mind immediately. The fact is that a purchaser will be the one ponying up the lion's share of the money in this transaction -- unless you count the mortgage lender, who gets it all back with interest. Until it comes time to sell the property do owners consider that doing so is not free. Sellers, too, must pay to convey their houses to others.
1. Realtor Commission -- Let's face it: "for sale by owner" fails more often than succeeds. Most owners learn that a real estate agent is better trained to move the property and will retain one sooner or later. The realtor works for the seller and likewise gets paid by the seller. Most often, the commission earned by the agent or brokerage is five to six percent of the sales price. So, a $300,000 home sale could yield up to $18,000 for the realtor. In terms of fees, this is the major one that a home seller will bear at closing.
2. Repair Costs -- If the purchaser's home inspector discovers problems with the structure of the house, or the health of the atmosphere or any other defect that renders lower home values, the seller is frequently on the hook for repairs. One way to address this is to take care of the matters before settlement. Another way is to credit the buyer with the estimated costs of the designated repairs. This works to mutual advantage -- the seller does not have to do any work and the buyer pays less at closing. Either way, the money comes from the seller.
3. Seller Inspection -- Sometimes a seller will commission his or her own home inspection ahead of putting the house on the market. While this is not mandatory, there is some wisdom behind this measure. For one thing, it gives the owner a heads up regarding any mechanical or structural problems. These items can be addressed and fixed before the home is listed. Alternatively, the seller can estimate their cost and factor repair allowances -- credits to the buyer -- into the sales price. Either way a closing is hastened because these property matters will not come as a surprise.
4. Making the House Presentable -- The lived-in look is not all it is cracked up to be. Sellers understand that a house might need some aesthetic improvements before prospective buyers will take it seriously. Some rooms might need a fresh coat of paint or new wallpaper; creaky staircases benefit from re-enforcement; or stale carpeting is an asset, once it is removed, that is. The owner can save money by doing the work or can ask the realtor to "stage" the home for maximum attractiveness. This option is expensive in the short run but can make all the difference as far as home values go.
5. Obligations -- Technically not a fee, paying off any mortgages and liens on the home fall to the seller. Depending on how negotiations go, the grantor of the deed might also be responsible for property taxes and utility charges up until the closing date. If a seller's attorney is retained, there is another fee. Additional costs are sometimes shared with the buyer. These include courier, notary, recording and escrow fees as well as transfer taxes and sums due to the home owners' association (HOA).
