A home sale generates hundreds of thousands of dollars. Even with the high revenues and potential capital gains, everyone wants to maximize profits. While you don’t want to spend money that doesn’t provide a return on investment in the final sale price, don’t hesitate to put the right money into your home. Save money in some places to spend in others. Here are some ways to save money when selling your home in Memphis.
For Sale By Owner
The biggest way to save thousands of dollars is to sell your home on your own. A real estate agent can charge up to 6 percent by law. This amount is split between the buyer and seller’s agents. And it all comes out of the seller’s profit.
Doing the math, this adds up. For every $100,000 of the sale price, $6,000 goes towards commission. For a $500,000 home, this is $30,000. That’s a lot of money especially if you are trying to maximize profits to pay down debts and get into a new home.
Selling the home on your own will reduce this fee. You might not be able to eliminate the buyer’ s agent’s commission, but saving $15,000 out of $30,000 is a hefty sum. If you are planning on doing a “for sale by owner,” make sure you understand the state real estate laws and have resources to draw up the transaction contracts. If you don’t, saving on the commission could cost you in legal fees.
Negotiate With Agent
Assume you don’t want to take on selling your home on your own. You do have another option. Agents are able to charge “up to” six percent. That’s right! It’s a cap, not a requirement. Keep in mind that most agents have brokers who take a chunk and marketing costs they front to sell your home so don’t expect them to work for free. But you can often negotiation between a 1-2 percent reduction in agent fees.
One way is if your agent also represents the buyer. Of course, the buyer needs to agree and have complete autonomy to choose who they wish as an agent. But if the stars align and this happens, you can justify the commission reduction because the agent isn’t splitting it with anyone else. Of course, he does more work, so you can’t drop it down to three percent (unless you are super-negotiator), but you can get it down to four often by just asking.
Even if the agent isn’t working for both, start the process of hiring an agent by saying you don’t want to pay the full 6 percent. Most agents will work for five percent max or maybe even less if it’s a hot market and they feel the process will go quickly. That’s $1,000 for every $100,000 in sale price.
Do the Work, But Not All of It
Save money by not doing everything everyone tells you to make the home shine. Pick and choose what makes the home look clean, decluttered and fresh. Do the work yourself where possible. Remove and paint kitchen cabinets and replace the hardware – it doesn’t need to be expensive new hardware either. Stage the home with your furniture-saving on that cost.
Weed the yard and take the time to do the deep clean yourself to save on hired laborer costs. If there is something that you can’t do, hire someone but only if you know it will yield you more in a sale than it will cost you to do.