Are you curious to know that how much commission do the sellers pay when they sell their house? You might have read about the closing cost for sellers. In simple words, when sellers want to sell their home or property, they pay real estate agents a particular amount as commission to real estate agents. So, if you are new to the market, you may not be aware of the closing cost for sellers.
Now, how much you should pay as a seller varies from region to region. However, in this article, you will study the structure of fees and commission of real estate agents in detail. You can call it commission of closing cost for sellers.
Before driving into closing cost, first, you should know about closing.
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What is closing?
In simple words, closing is the completion of a deal. It takes time to complete a sale. Before closing the deal, the buyer would ensure whether you, as a seller, paid or not all the loans regarding your property. After that, the buyer would transfer your payment.
The buyers would ask you to transfer all legal documents after payment. Closing in real estate takes almost 30 to 60 days.
Closing cost of a home
As we mentioned above, the closing cost of a home varies accordingly. We are only here to discuss the commission which sellers have to pay, not buyers. The rate of closing ranges from 5% to 10%. For example, if you want to sell your house for Rs50000000, you have to pay that particular percentage to the agents.
Why should the seller pay the commission?
Sometimes when sellers cannot find a customer, they take the support of the agents to help them sell their property. In previous articles, we let you know about the agent’s commission that agents are from both sides. The agent who charges commission on buyers is called buyers agents, and the other who demands a commission of seller is called seller agent. Sometimes, at the same time, one agent can be an agent from both sides.
So, not only seller has to pay commission, but the buyer also pays the commission. But, here we are discussing sellers.
Other payments which sellers pay
Sometimes a plot or home stays longtime on platforms. The sellers then take crucial pressure of having property in hand and not selling it. Then the sellers ask the buyer to purchase the property, and sellers would pay some charges on behalf of buyers. Other payments which sellers pay are buying closing costs, application charges, etc.
How to calculate closing cost?
While knowing about the cost of closing, you must consider some payments which form the closing cost.
Appraisal fee: The fee of a professional appraiser who you hire for valuing your property is called an appraisal fee.
Attorney fees: An attorney who oversees sales requires some amount as his fee. That fee is called an attorney fee. This also varies from state to state.
Discount points: These are some optional amounts. But these are not paid directly to the buyers, but the sellers give them some discount. For example, the price of a home is 10000000, and the seller, after payment, payback 50000 to the buyers that is somehow included in the closing cost.
Agent fee: This is the most important fee of all. When you want to sell your property, you should hire an agent. After you made a deal successful, the amount that the agent receives is called the agent fee.
Home inspection fee: Before the deal is done, an authorized inspector will carefully examine your property, whether it is legal or not. In that case, you have to pay some extra charges called a home inspection fee.
In short, selling a home may bring your profit, but you should consider all the closing costs for sellers.
Muhammad Junaid is a senior Analyst and Search Engine Expert. Extensive experience being a lead writer in Sigma Properties | The Taj Residencia Islamabad. Work for years with local and international enterprises. Also, represent well-known brands in the UAE.