Are you wondering exactly how much your closing cost will be to sell your house in Greater Grand Rapids? This list is an estimate only and should not be considered to be held as the true and actual closing cost to sell your house. The reason is simple, the sellers closing costs will be based on the sales price of the home, how well you or your agent has negotiated your real estate transaction and lastly the company that you hired to represent you in the sale of your home. Sometimes the buyer can ask you to pay a portion or all of their closing costs which will totally change your costs.
In the Greater Grand Rapids area, selling a house has many pitfalls, so it’s not as easy as putting a sign in the front yard and put it on the MLS and wait for the offers to come rolling in. There are too many variables that will come into play when selling a house, least of which is negotiating a purchase agreement and getting it to close.
To sell a house in today’s Grand Rapids Real Estate Market; you must be an expert in or you need to have the help in both marketing your house, selling it and most importantly closing it. Even before you put your house on the market your agent should do an estimate of net sheet for you, showing you the estimated closing costs that you can expect to pay. Once you receive an offer, then your agent should fill out a new estimate of closing costs so you’ll have a better idea of what your net proceeds will be. Net proceeds is the amount of the check that you’ll receive at the close.
You should consult with your agent to verify what your estimate of closing costs will be and have an estimate of your net proceed. If they are unable to calculate your closing costs for you then you may be well served to look for an agent that can.
How Much Are Commissions?
In Greater Grand Rapids, the commission is 100% negotiable and will vary depending upon your area, experience of the agent, the company you hire to represent you, and type of agency. The listing brokerage fee will include what the percentage will be paid out to the buyer’s agent broker if there is another broker involved in the transaction. Most importantly the listing agent will cause the house to sell, negotiate the purchase agreement in your favor, remove contract contingencies and then the most important part of any real estate transaction…get it to the closing table. Remember, I still have all my expenses, I assume all the risks, the marketing of your home, holding an open house, broadcasting the information to the other agents in the area and potential buyers, listing your house on other portals such as Realtor.com, Zillow ect., and manually posting ads on Craigslist, Facebook, Blog Site such as Active Rain, RealtyNews, agents websites and more.
I’m not permitted to use a fictitious commission percentage as an example due to the fact that would be in violation. If you have a question regarding commission rates, please call or text me at 616-485-8955. In Greater Grand Rapids, typically the seller will pay the entire commission to the listing broker unless there is another broker involved. If that is the case, then the listing broker will pay the agreed upon split to be paid to the buyer’s broker. So, in essence, the seller is paying for the buyer’s agent to bring in the buyer.
Compensation versus Commission
I prefer to use the term compensation versus commission. The reason is that I work on a contingent basis versus a retainer basis. When I say a contingent, what I mean is, is I put up all the upfront costs. I pay for the marketing, I pay for all the advertising, I pay for all my company fees, which is my office rent, my car costs, my computer cost, my E&O insurance – and all the fixed costs that are in business. I have costs whether your home sells or not. So I choose to work on a contingent basis versus a retainer basis. A retainer is, you would give me one large sum of money and we would deduct the expenses from that chunk of money as we sold your home. But because I work on a contingent basis, I only get paid when I make your dreams come true.
How Much Are Appraisal Fees
The average appraisal fee in Greater Grand Rapids is $350-$400, depending on the size and condition of the home. The appraiser will look at the condition of the home especially if the financing is FHA or VA. Those two financing options tend to be a little more stringent. The home must meet minimum standards such as 3 years life expectancy on roof shingles, GFCI outlets within 6 feet of any water faucet and more. Typically this is a buyer cost to get their mortgage. The reason I’m putting this here is if the buyer asks you to pay for their closing costs, the appraisal is part of the buyers closing costs. The appraiser looks at every inch of your home and will determine if your home is worth the amount of the offer that was put on the house. If your home doesn’t appraise for the sales price then its back to the negotiating table. This is where a strong negotiator, your real estate agent will be worth their weight in gold…well money, your money.
What Does It Cost To Stage a House?
Remember the previous paragraph regarding vision as one of the most powerful senses that the human mind possesses. So it makes sense to make an impact on the sense of vision just as the potential buyer enters your home. How do you do that and what are the costs involved. Have a professional come in and stage your home and show you where to position your furniture or possibly remove a piece or two. How does the color pallet look with your furniture, carpet, and drapery? It might require a room or two to be repainted. The cost for a professional to come in and give you an overview of your home and make suggestions in order to have each and every room pop could cost up to $250. If you are moving and are going to leave your house empty it might make sense to have the home staged with furniture in each room. This can get a little pricey, up to $1200 a month. You are going to want to excite the buyer’s visual senses when they walk through your front door. Leave a great impression with the next home owner.
Closing Fee: A $275 fee that is paid to the title company for their services rendered to close the transaction. If you’re a seller this is called a closing, settlement, close of escrow, by any name, this is where you get your check. For this example, we’ll use $275 for the closing fee.
Administration Fee: This is a fee that is paid to the broker for keeping files stored for seven years and updating of the do not call list. These are mandated by the government and thus passed onto the buyer and seller. Administration Fees will vary from company to company but I think this is a pretty good representation, $195-$395.
County Deed Tax/Stamps: This is a $0.55 per $500 or portion thereof the purchase price of the property. If the purchase were $100,000/500, multiply by $0.55, you would pay $110.00 at closing.
State Deed Tax/Stamps: This is a $3.75 per $500 or portion thereof the purchase price of the property. If the purchase were $100,000/500, multiple by $3.75, you would pay $750.00 at closing.
No Proration: Buyer or Seller will pay one or both the summer tax bill and the winter tax bill. This will depend on how property taxes are negotiated.
Calendar Year Proration: The West Michigan Regional Purchase Agreement has a paragraph as to how to handle property taxes. The owner will be responsible for the property taxes from January 1 to date of closing. For example, if your property taxes were $3515, then you would divide that by 365 days and come up with a per diem or $9.63 per day. The day of close is April 30, then you would have used 120 days and would be responsible for $1155.62. $9.63 x 120 days equals $1155.62.
Fiscal Year Proration: Taxes will be prorated as though they are paid in advance or arrears.
Title Insurance Fee: This fee will depend on the purchase price. For example, if the property sold for $150,000, the seller is responsible for $993.73 for title insurance. Title insurance ensures that the seller agrees to convey marketable title to the property.
HOA Fees: Home Owners Association Fees typically will be paid monthly. If you buy or sell a property that has HOA Fees, they would be prorated for the month. The HOA fees will pay for certain services or amenities such as water, sewer, trash, lawn care, snowplowing and more that are being provided for the community. HOA fees are usually associated with condominiums but there are other projects that have associations. Be careful when you purchase a condo or home that has an association because they will have rules. regulations and restrictions that you’ll have to follow. So if you’re a free spirit and do not like being told what you can do and not do then you may want to rethink the purchase of that property.
Home Warranty Plan: A 1 year home warranty plan is optional. Either the buyer or the seller can purchase the home warranty on the property. The warranty will typically cover a multitude of components of the home. The basic home warranty in West Michigan will start at $400 up to $600 depending on plans and warranty companies.
Choose An Agent To Help You With The Process
With the help of a Greater Grand Rapids real estate expert such as Doug Hansen, you are more likely to sell your house quickly and maximize the value of your house. You need someone who knows how to sell Greater Grand Rapids house and is familiar with the rules and regulations in the area.
It can be costly to sell a house in Greater Grand Rapids area and you’ll need someone that is a full-time professional Realtor and knows who my fiduciary is. Do you know the difference between Doug Hansen and a “Team”? I know my fiduciary responsibility is for my client whether you are a seller or a buyer. I will keep your information confidential. A team will have many eyes on your file and do you want a team member looking at your confidential information? A team may tell other team members confidential information that could cost you money because of their lack of knowledge of what fiduciary responsibility is or who they own that responsibility to. I will negotiate in your best interest. They may negotiate in their best interest. I know where your transaction is in every step of the process. A team with many hands in the pie may very well lose track of important information or potentially miss a deadline which could be detrimental to you and cost you money in the long run.