Real cost to sell a house

[jewozzy]

I'm not a realtor so I cant accurately asses the current value or expected future value of remodels. But a lot of people buying older houses do so with the intent to remodel anyways so there is a segment that will shun a price premium.

Regardless of that...I think of it from a perspective of risk. You have 2 main risks that can cost you big.

1 - you may underestimate the sales price. If you think the house is worth 420K and it actually sells for 395, you are eating all of that 25K loss. If you sell and split then you're splitting the loss and not immediately out of pocket on your investment. To cover this risk you have to lowball your brother in law (which he'd be crazy to finance your risk. Hes taking a financial loss for your financial gain). You say hes ok with this, but if he sees that yall sold for way more just from 15K in bathroom improvements...things start to look real fishy.

2 - you're assuming that you will get a dollar for dollar return (or better) on your investment. You have to sit on this house for a few more months to finish updates just to find out if your 15K pays off.

It's also worth looking into any tax impacts. I'm not sure if theres a difference between inheritance and an investment property.

Either way, I dont do this for a living so jm thinking from the lowest risk perspective. A realtor should know much better...and should be able to truly quantify the risk.

I'm looking at this exact scenario, and there's no way you'll see double your return. Flippers buy low due to disrepair, and get their margin there, not because of the updates. The market and nearby comps will dictate what the house is worth, updating the bathrooms will certainly help it sell faster, but you're not going to drive up the dollar per sqft significantly.

Those both make sense. Hopefully, I'll have some more info on it later this week. I need to get a true set of comps an check everything out.

[ceyko]

Once had a realtor explain a lot of changes/upgrades/updates are selling points/pluses not always value increasing. In another thread it's covered pretty well what is/is not good to upgrade/update to help a house go quickly at a decent value.

I have a remotely similar situation where I had to liquidate an estate of much lower value. It was somewhat hostile between another person and I - but the message is the same, sell as quickly as possible. Took me 2 years to get through it all since it was far away - technically still dealing with it 2.75 years later. Either way, things add up FAST while you're diddling with remodeling. Taxes, lawyers (and associated CPA...bonds...etc), maintenance (stuff breaks, lawn mowing, electric, water...etc) and insurance.

Recommend estate sale/auction (if needed) - appraisal...cleaning service...inspection....fix anything they see....list on market and sell quickly.

[jewozzy]

Once had a realtor explain a lot of changes/upgrades/updates are selling points/pluses not always value increasing. In another thread it's covered pretty well what is/is not good to upgrade/update to help a house go quickly at a decent value.

I have a remotely similar situation where I had to liquidate an estate of much lower value. It was somewhat hostile between another person and I - but the message is the same, sell as quickly as possible. Took me 2 years to get through it all since it was far away - technically still dealing with it 2.75 years later. Either way, things add up FAST while you're diddling with remodeling. Taxes, lawyers (and associated CPA...bonds...etc), maintenance (stuff breaks, lawn mowing, electric, water...etc) and insurance.

Recommend estate sale/auction (if needed) - appraisal...cleaning service...inspection....fix anything they see....list on market and sell quickly.

Yeah, I guess I was a little blinded by the price point and thinking it needed to be top notch. With that being said I can def see if we were willing to give an allowance (kickback or whatever the hell its legally called) for the new homeowners to update as they see fit.

[bcoop]

I'm looking at this exact scenario, and there's no way you'll see double your return. Flippers buy low due to disrepair, and get their margin there, not because of the updates. The market and nearby comps will dictate what the house is worth, updating the bathrooms will certainly help it sell faster, but you're not going to drive up the dollar per sqft significantly.

This^.


If you're dead set on squeezing a few more dimes out of it, before you commit to anything, get a broker price opinion from 2-3 different realtors (should cost you about $150/ea), and I'd ask for them to assess current value and value with the updated bathrooms. You're going to get differing opinions and prices from each of them, and it's going to be a wide range. I guarantee it.



Sell it as is. No remodel ever goes as expected, even for small jobs. There are too many unknowns to give any real advice with hard numbers. HGTV House flippers are losing their asses all over the place. Just ask around. The circumstances have to be absolutely perfect for ME to remodel, and based on what you've stated thus far, I wouldn't do it unless it was going to be my primary residence.

[lincolnboy]

Free house....sell it. Upgrade small stuff and paint...

[jewozzy]

With all of this being said, I'm still unclear on the actual fees (not including holding costs) associated with a sale. I understand the realtor fee's are negotiable. But some are saying closing is seller, some say buyer, but lets assume we'll be paying those what would they avg % wise?

[Rick Modena]

With all of this being said, I'm still unclear on the actual fees (not including holding costs) associated with a sale. I understand the realtor fee's are negotiable. But some are saying closing is seller, some say buyer, but lets assume we'll be paying those what would they avg % wise?

Man there are lot of variables these days. I am buying and selling as we speak, my realtor told me to add in 1% for closing cost will give you a close estimate.
And that is close to being church, the variables come from all sorts of costs, HOA fees, inspections, appraisals, taxes (depends on the year), realtor fees, title insurance fees, etc.

IMO, do small things once the house is empty, make sure it is clean, carpet, windows, paint is cheap and you can do it yourself, roll a few walls. The less a new home owner has to do the better, not only look at the COMPS, but do your own research in the hood, Realtor.com will show you ALL the homes that are for sale in your area/zipcode, see what the are going for and see their upgrades and pricing. I mentioned this in the other thread, I interior painted my walls with current colors, removed worn out carpet with wood flooring and we keep it clean, no pets or kids here.
The two other house that COMP'd like mine have not sold yet, they don't have what I have and the current buyers chose my home over theirs. One had a decent interior, but the yard looks like shit (drive/curb up appeal)
the other was two years newer, but had too much white, white counter tops, white cabinets, too bland imo.
I also think you're pricing in that area is low, that area is RED hot, you update those BR's and you could get more and at a minimum move it fast. Most buyers want close to turn key, they want to move in, not remodel. If tw BR's is all you need to do to cash in, I would do it.

[bcoop]

With all of this being said, I'm still unclear on the actual fees (not including holding costs) associated with a sale. I understand the realtor fee's are negotiable. But some are saying closing is seller, some say buyer, but lets assume we'll be paying those what would they avg % wise?

My parent's house is for sale currently, and this is a net sheet from their realtor relating to an offer they just got of $344,222.
Title Fees

Owner's Title Policy - $2123.15
Escrow Fee/Closing Fee - $500.00
GARC Fee - $2.00
Atty - Release of Lien - $100.00
Maintenance Transfer Fee - $75.00
Attorney Fee - $100.00
Tax/Maint Certificiates $49.00
E-Doc Fee $12.00

Other Fees

Recording Fee - $26.00
Home Warranty - $650.00
Amended Standard Exceptions - $150.00
Survey - $400
Buyer's Broker Fee (3%) - %10,326.66
Listing Broker Fee (1%) - $3442.22

So on an offer of $344,222, they will net out at $325,928.77 (using a discounted listing agent).

You don't have to pay for home warranty, though most people do. Notice the listing fee (discount realtor, Redfin). I'd say the fees and everything are pretty standard as to what they cost, outside of the broker's fees, which are a percentage. Most of it is negotiable in terms of who pays what, but I don't believe any buyer's agent would ever lower their commission, and, title policy must be paid for by seller. No way around a recording fee, atty fees, etc that I'm aware of.

[Ruffdaddy]

So 5.2%. That's pretty close to what we've seen on our last 2 home sales as well (using a discount realtor or flat fee service). Our last one was just a tad lower but not by an overwhelming amount.

Adding in full commission only brings that to 7.2%.

We didnt really need to fix much because it was a newer house, but that can really eat into the final sales price as well.

[jewozzy]

My parent's house is for sale currently, and this is a net sheet from their realtor relating to an offer they just got of $344,222.
Title Fees

Owner's Title Policy - $2123.15
Escrow Fee/Closing Fee - $500.00
GARC Fee - $2.00
Atty - Release of Lien - $100.00
Maintenance Transfer Fee - $75.00
Attorney Fee - $100.00
Tax/Maint Certificiates $49.00
E-Doc Fee $12.00

Other Fees

Recording Fee - $26.00
Home Warranty - $650.00
Amended Standard Exceptions - $150.00
Survey - $400
Buyer's Broker Fee (3%) - %10,326.66
Listing Broker Fee (1%) - $3442.22

So on an offer of $344,222, they will net out at $325,928.77 (using a discounted listing agent).

You don't have to pay for home warranty, though most people do. Notice the listing fee (discount realtor, Redfin). I'd say the fees and everything are pretty standard as to what they cost, outside of the broker's fees, which are a percentage. Most of it is negotiable in terms of who pays what, but I don't believe any buyer's agent would ever lower their commission, and, title policy must be paid for by seller. No way around a recording fee, atty fees, etc that I'm aware of.

So 5.2%. That's pretty close to what we've seen on our last 2 home sales as well (using a discount realtor or flat fee service). Our last one was just a tad lower but not by an overwhelming amount.

Adding in full commission only brings that to 7.2%.

We didnt really need to fix much because it was a newer house, but that can really eat into the final sales price as well.

This is great, Redfin is who I have always used to look at houses and try to get an idea of what houses are selling for and the features I should have. Thanks!

[Rick Modena]

Our current home is a VA loan those roaches are making me pay for shit I usually wouldn't, but seeing as they gave me full asking price, it comes down to a "give to get scenario".

Every home is different, Dallas County taxes and fees are different than Collin county and realtors will get what they can. So many of those leeches that you can usually get your listing agent to do at least 1% - 1.5%, your results mat vary.

[bcoop]

This is great, Redfin is who I have always used to look at houses and try to get an idea of what houses are selling for and the features I should have. Thanks!

This isn't my house, and I didn't hire them, but I wouldn't use them fwiw. I can't say with absolute certainty the issues that we've had were 100% on the realtor, but this goddamn house has been on the market since 5/1, with little traffic, 3 offers, one which fell through (contingency). All offers were below asking, and if they drop the price again they will go under $100/sq ft which is fucking insane imo.

I'd look elsewhere for your realtor.

[jewozzy]

This isn't my house, and I didn't hire them, but I wouldn't use them fwiw. I can't say with absolute certainty the issues that we've had were 100% on the realtor, but this goddamn house has been on the market since 5/1, with little traffic, 3 offers, one which fell through (contingency). All offers were below asking, and if they drop the price again they will go under $100/sq ft which is fucking insane imo.

I'd look elsewhere for your realtor.

Ahh the catch!

[Ruffdaddy]

Ahh the catch!

I used a flat fee service, not redfin for the last house. Great experience but the market was crazy.

The house before that was an agreement with realtor that I would list them as the buying realtor of they sold for 1% commission. If you're not buying...you cant do that obviously.

Also...closing costs can vary quite a bit based on loan type so it's a big range. Like 4-10K or something like that. And if you want to buy out PMI/MIP because you didnt do a full 20% down...that can be a few grand.

[bcoop]

Also...closing costs can vary quite a bit based on loan type so it's a big range. Like 4-10K or something like that. And if you want to buy out PMI/MIP because you didnt do a full 20% down...that can be a few grand.

That's all on the buyer, not seller.