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7 Reasons Homeowners Avoid Realtor Fees

While realtor fees are not, in actuality, fees at all, they are an investment opportunity in your real estate transaction. While it certainly does cost you money to employ a realtor to assist you in buying or selling your property, there is a very good chance that their time will ultimately yield more than the monetary investment you spend on their services. That being said, what is a Realtor and why do they make such an excellent investment for both you and your real estate transactions? Here are some of the top reasons that a Realtor is such an invaluable asset for any real estate investor.

First, as mentioned above, Realtors work off of a commission, which is typically 10% of the final sale price of your real estate transaction. This means that the realtor fees you pay are essentially a portion of the commissions you earn from the real estate sale. The more work you put into real estate sales, the more of a cut you will receive. And with the wide range of realtor fees that are charged, it is possible to save quite a bit of money with your Realtor fees. If your house requires extensive renovations before you can sell it, you may be able to get away with paying far less in realtor fees than you would otherwise. In short, realtor fees are an excellent way to trim expenses while making your real estate investment even more lucrative.

Second, by requiring a certain percentage of the home sells for you to earn a commission, realtor fees encourage people who otherwise would not have been able to buy a home to take a chance on your flipping effort. For example, if your realtor fees are only ten percent of the home's selling price, and you bring in five percent, you will still make a decent profit. On the other hand, if your realtor fees are forty percent of the home's selling price, you could barely break even. In these cases, charging a one-fifth percentage point higher commission helps you get over-indexed, which means your home will actually sell faster for you.

Third, you can use realtor fees to leverage the purchase price of your house. Let's say that you are buying a one hundred thousand dollar home. This price is generally a bargain because this house typically sells for about six percent per year. But, if you take out a mortgage at the same rate as your purchase price, you can easily raise the amount of your loan by a factor of two or three. That means that you would end up making four or five times the house's current value, instead of the standard six percent. This is a significant advantage that can help you to realize significant real estate profits.

Fourth, realtor fees can save you significant time. It can take anywhere from four to eight weeks for a listing agent to complete an MLS search and find a buyer. If you pay just ten percent of your closing costs up front, you can move through the buyer's market faster. Typically, realtor fees don't tack on any additional costs until the sale has taken place. Once senior apartments near me is completed, the closing costs should be your responsibility. If you think you don't have to pay anything up front, you are likely being sold a bill of goods.

Fifth, not only can realtor fees reduce your monthly budget, they can kill your sales prospects. Because realtor fees often tack on a percentage of the final purchase price, you have the additional expense of paying an agent to market your home for you. A good realtor will make sure there are no last minute buyers, that you are shown the most homes in town, and that you aren't exposed to competition when you list. These agents will also be able to assist in the closing process, so you won't need to worry about paperwork. If you want to save money, it's better to let a pro handle the closing on your behalf.

The sixth reason buyers avoid realtor fees is because they believe the closing cost is "unnecessary"

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