Commissions and taxes

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Submitted by Escoguy on June 3, 2017 - 8:49pm

I can only think if taxes (capital gains) and commissions were lower that more homes would come on the market.

I have one agent who offered to sell at 1% but as I wasn't fully committed, I didn't ask if there would be an additional commission for the buyers agent, but even Redfin shows 1% plus 2.5% for a total of 3.5%.

What is the lowest anyone has gotten for all commissions?

Redfin also estimated about $5K in selling costs for taxes/fees etc.

As I've never sold a home and only bought, what has been the typical amount for a $700K home?

Thanks

Submitted by gzz on June 4, 2017 - 3:07am.

A flat $1500 for handling all the sales paperwork.

Submitted by spdrun on June 4, 2017 - 12:29pm.

Isn't up to $500k of profit (for married couple) exempt on a primary? Also, CA is a title agent state -- you can just use a title company to sell. No need to use a parasite.

Submitted by sdsurfer on June 5, 2017 - 3:01pm.

Quick disclaimer...I used to be a "parasite" in my past life and my wife is still at it, but I moved on to work at a tech company!

Commissions are negotiable so you can negotiate with anyone on the rate and how willing they will be is going to be directly related to how busy they are.

The lowest number would be to do it yourself and cut the agent/brokerage out completely and just use a title and/or escrow company. Personally (being a bit busy), I'd add 10-15% to my price and give an agent 5% of that (split equally with the buyers agent/broker) in exchange for them doing all the work and I'd let them know there will be no price reductions. Let them know you are going with them to sell at full price (actually a little above) and if they cannot get it your going to cancel the listing and do it yourself at market value. There are nuances to this in that you might get a full price offer, but the appraisal could come in low and you could mention that if they find the buyer they will agree to do it for 4% or something. Again...everything is negotiable.

I know some would disagree, but I really look at Realtors and Brokers like Attorneys. No...I'd rather not use one, but if I do I definitely want a competent one. I'd think they are even better in a way because they work for free until the deal closes as opposed to attorneys who send you a bill even when nothing has been accomplished.

I believe there are some parasites in real estate and there are some parasites in other industries too. I never assume everyone in a certain industry is anything just like I do not assume everyone in New York is an a-hole. I'm sure there are some and maybe a higher concentration, but there are a-holes in San Diego and every other city/country/land too.

It might not be a bad idea to interview a couple people with the intention of doing it yourself and just seeing how it goes. Maybe you gain some knowledge (for free) of what your list price could be even if you do it yourself or maybe you meet someone that you might want to work with.

I think the reason inventory is so low is because people are getting a good enough return on their investment and feel other options would be more risky than assuming rents will continue to go up like they have for quite a while.

Good luck to you whatever you do and feel free to PM me if you have any specific questions I can help with. I know you have chimed in with useful information that I have appreciated over time.

Submitted by The-Shoveler on June 5, 2017 - 4:51pm.

There are definitely A-hole agents in RE so be careful that your agent is really representing you.

I had a listing agent that was way more interested in helping out one of his flipper buddies than representing our interests.

You can truly get into a nightmare situation very fast.

If possible always leave yourself an out.

Anyway IMO.

Submitted by jjkonop on June 7, 2017 - 8:25am.

My friend sold his house for 500k and what he paid extra amounted to around 7k. It was last summer

Submitted by treehugger on June 7, 2017 - 4:51pm.

sold my last house myself, buyers saw house without agent, but weren't comfortable not using an agent. Full price with a 1% commission to agent.

Bought my current house (a foreclosure) using listing agent (when bank said highest best due by 5 on Wednesday at 4:45 he "suggested" a number, surprise it was the right number to get me the house! I have no idea how much commission the bank agreed to pay him.

Problem is that if folks looking for a house are already using an agent the agent may either subtly or outright steer them away from a house they are not getting a big commission on. With low/no inventory that may not matter.

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