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The Cost To Sell Your House...
The Law of Gross vs. Net
Every single house transaction in the country, no matter how the seller may choose to sell it,
has economic laws that apply. In other words, you could sell it yourself, you could use a real estate agent or you could sell it to an investor like us. These laws still apply.
Marketing Costs
The first and most important cost is marketing. Whether you're paying a Realtor a commission to list your property or you're running ads in the local newspaper you're still spending money on marketing. And just for your information, 6-7% isn’t that bad especially when you compare it to a normal business. According to Forbes Magazine the average business in America spends just over 8% for marketing.
So it doesn’t matter if you are marketing the house, a real estate agent is marketing the house or we're marketing the house. Whichever one of us does that we’re still going to have to pay that 6-7%.
Buyer’s Discount
We’ve all learned over the years to never pay asking price on a new car or a home, haven’t we? And depending on the market, sometimes buyers can demand more and more, can’t they? The National Average for buyer’s discount consistently runs about 3-5%
Closing Costs
In order to sell your house certain paperwork and inspections need to be completed and no matter how you sell your house, you have to pay these. The average closing costs are 3%.
A few examples of these include the:
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The Law of Deferred Maintenance
The law of deferred maintenance basically says, you either pay now or you pay later.
If you pay now to upgrade the appearance of a house it will sell faster at a higher price.
We see lots of evidence of that as most buyers just have no sense of vision. Buyers will typically say, “I want a house…not a project!"
Or
You can pay later, by increased holding costs and a lower selling price. If it takes you an extra 4 months to sell your house, what’s that cost just in mortgage payments, not even considering the hassle?
So, the bottom line is…
Pay now or pay later, but you must pay.
So Let's Summarize
6-7% Marketing Costs
3-5% Buyer's Discount
3% Closing Costs
3% Deferred Maintenance
15-18% Total Costs to Sell
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