How much can I save by selling my house MYSELF?

Discussion in 'The Okie Corral' started by MainStreetIowa, Feb 10, 2010.

  1. MainStreetIowa

    MainStreetIowa

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    Let's say I sell my house privately for $275,000. I'm not silly enough to think that I'd be able to keep all the money. In addition to paying off my own balance on the home (about $175,000), what types of taxes or other fees would I have to pay Uncle Sam or whomever?

    Thanks.
     
  2. MainStreetIowa

    MainStreetIowa

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    LOL, I see that the question in the thread title is a bit different than the one I went with in the thread. :embarassed: I kind of changed my mind and forgot to amend the title.
     

  3. CZ guy

    CZ guy

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    The realtor typically gets a commission of 6% on the sales price. You do the math.
     
  4. happy seal

    happy seal

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    This ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^! LOL!
     
  5. MainStreetIowa

    MainStreetIowa

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    :) That part I know.

    I'm mainly wondering what sort of taxes and fees I would incur by selling the house privately, regardless of whether I'd have to pay these same costs if I were to go through a realtor.
     
  6. Gallium

    Gallium CLM

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    Was it your 1st home? Speak with a CPA or tax attorney. IIRC I did not pay any income taxes on the sale (proceeds) of my 1st property. Now, I don't remember why :dunno:. Taxes vary greatly by locality, and the type of real estate.

    Yeah, the attorney/CPA is gonna cost you money, but may also save you some $$$ today and down the road.

    'Drew
     
  7. Batesmotel

    Batesmotel

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    Realtors usually get about 6% but if you have a good realtor they can actually get you more cash in hand. Better negotiation, marketing, faster sale, and all of the paperwork is checked and rechecked not to mention they make sure everything is covered by title insurance and an E&O policy.

    You will have to pay off all loans and liens on the property as well as taxes and assessments up to and including the day of the sale. You may also have title insurance and title searches, home warranty, transfer tax (if required by your state), appraisal fee, document prep fee by title company, recording fee.

    A business partner and I owned an entire street of homes several years ago. He owned one side and I owned the other. I used a realtor and he didn't. In the end I made more than him, in less time and with fewer legal hangups and hassles than he did.

    Try selling it yourself but it is a good idea to talk to a realtor also. If you do sell yourself have an attorney look over the papers before closing! It will be the best money you ever spent.
     
  8. MainStreetIowa

    MainStreetIowa

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    OK, fellas, thank you. I appreciate your help. :wavey:

    I was preeeetty damn sure that the $100,000 wouldn't all be going into my pocket! It ain't like sellin' a TV. ;)
     
  9. Ender

    Ender ComfortablyNumb

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    Realtor = 6%

    Capital Gains = (in this economy, probably not much!)...but you don't have to pay Capital Gains if you invest in a different house within something like 1-3 years. I don't remember exactly...so if you are worried, contact a RE Attorney for $150 dollar consult fee....
     
  10. GlockPride

    GlockPride Glock 23

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    This is probably your biggest asset? I would NOT take the risk of selling this house by myself. Too many legal and other things that I don't deal with everyday. More important for me to use a professionals service than to be out a house or a whole lotta dough.

    The 'standard' is 3% to the listing agent and 3% to the selling agent. However, this is highly negotiable. We sold a house last year and I paid 2.5% to our listing agent and provided 3 to the selling agent. However, in negotiations he put that he wanted 3.5%. We went around and around and finally gave him 3.25 after I stung his clients on a few items that I refused to deal on. And I told them that their agent cost them money!
     
    Last edited: Feb 10, 2010
  11. PawDog

    PawDog NRA Member

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    You'll pay real estate taxes, title and closing fees, and won't have to pay any federal income tax if the sale is for less than $250,000.00, if it's your primary residence, as I recall, if you've owned the home for over 2 years? (not sure on the year thing).

    Don't know about the state tax issue in your area......You can sell on your own, depending on the market in your area. I sold my previous property myself, avoided the realtor's commission, completed the HUD docs myself, and closed via fedex through a title company in the sold property area.
     
  12. bradleybear

    bradleybear

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    No capital gains if your profit is under 250,000 if you're single or $500,00 if marriied.
    That is a life time credit. So if you made $200,000 on a previous house and $100,00 on this house you will owe for $50k capital gains
     
  13. GreenDrake

    GreenDrake Rip Lips

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    I am a Realtor so I will wish you luck first of all. The odds are stacked against you in this market, but it all depends on where you live and your current market conditions. Ask yourself this, if you FSBO, WHO wants to save on the commission? YOU or the Buyer? The answer is both. Just for giggles take the fact that a FSBO home nationally takes in 16% lower sales price than a listed property. What is 16% of your price? Now, if you listed with a Realtor, you generally have a 10% gain on that price after commissions.

    I work with FSBO's a lot, be forewarned there are Realtors out there who will do the "beat down" on you, tell you they can get a higher price then wait to get a reduction. You have to be competitively priced, bottom line, there is a pecking order for how the home will sell, versus the price and competing properties.

    Also keep this in mind, you are going to get a ton of "will you carry paper" calls, the inconvenience of having to show it when you least expect it, and no market exposure other than local ads you pay for.

    Yeah I know, sounds like a song and dance. Keep this in mind when you think agents make a killing, their commission is pre-tax before expenses and splits....most agents are at the poverty level right now and take home about 20% of what you think they do.

    Interview a few, you will see why some are more successful at selling a home than others.
     
    Last edited: Feb 10, 2010
  14. Halojumper

    Halojumper

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    Yeah, exactly, and of that 6%, roughly 2.8 (nearly half) goes to the agent of the buyer. If nobody pays that, no agents will bring anybody and the target market will be largely diminished.
     
  15. Ender

    Ender ComfortablyNumb

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    I spent 4 months as a buyer with a realtor who was a big nay-sayer, doom-and-gloom type. I looked at probably 30 houses during this time. I was a picky buyer to be sure, but I made about 4 offers that were not too bad, considering the market. All were turned down. One of the houses sold almost a year later for about what I offered...stupid them :supergrin:

    The DAY AFTER my realtor called me to tell me that she had to part ways because I wasn't serious enough, I saw the first house I looked at back on the market for 10k less. I contacted the selling agent directly and owned the house in no time at all (I think it was under 14 days from contact to move in). If she'd held out for a day extra, she would have split the commission (or he would have waited to get his own buyer and take all of it).

    When I was in her office, it was fairly silent. When I was in his office, the phones were ringing off the hook, and he was busy as hell, moving from one appt. to another it seemed...but he never left me pissed off and waiting.

    So, yes...I agree...some are infinitely more successful at selling homes, for one reason or another.
     
  16. glockeglock

    glockeglock

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    Almost all the terms of a real estate contract are negotiable. Agent fees certainly are. By some magical edict from the grand real estate agent poo bah that everyone takes as written in stone, residential sales are typically bringing 6% to the agents involved. The seller's realtor gets 3% and the buyer's gets 3%.

    If you don't have an agent, the buyer's agent is going to try to convince you she gets all 6%. She may even show you her contract with the buyer. Well, that contract is between her and her client; it does not bind you. You are free to set the terms, just as you are free to negotiate price. (And the buyer is free to walk and most people are afraid to offend their agent).

    I got stuck using a realtor on one house purchase because the seller's realtor refused to deal with a private buyer. My realtor accepted 1% to get the door pried open. Simultaneously, another agent took 1% to sell my old home, but we did have a separate deal going that made it worthwhile to her.

    The biggest problems with going without an agent when selling a home is that the realtors have a lock on the marketing. You will not get your home into the effective listings and a lot of agents will steer their clients away from your home.

    Finally, there are many legal and practical pitfalls in buying and selling a home. If you're not familiar with these, it may be best to hire a realtor or an attorney.

    Good luck to you sir.
     
  17. MDLibertarian

    MDLibertarian NRA Life Member

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    :agree: What so many of these other guys have said. Personally, I don't think saving a small amount of money is worth all of the hassle, time, and paperwork you're going to invest in selling your home to make it worth your while to sell your home by yourself. When I bought my home (the one I'm still living in) I saw the amount of work my agent put in over the four months she helped me look for a home. I have to say I would never ever want to deal with that on my own, plus having to be available at damn near anytime to show your home just isn't worth it. IMHO, use a reputable agent and save yourself a lot of time and headaches.
     
  18. gjk5

    gjk5 Pinche Gringo

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    Very well stated by others already:

    Realtors will typically get a you a better price, expose your home to a wider pool of buyers, pay the advertising costs and cover your *** legally. Aditionally; the reality of it is a lower paying listing will get shown less. You will get more bang for your buck offering an additional $1,000 bonus rather than a $1,000 price reduction.

    The commission MAY be negotiable (but typically cut rate realtors offer cut rate service). If you are a return customer, are listing and buying with the same realtor, listing multiple properties etc; it is perfectly reasonable to pay less and get just as much service.

    I typically tell people to expect +/-8% cost to sell (barring past due taxes, concessions or applicable local or state tax which we do not have).