Peradventure, you have learned how to sell a house without an agent in LA; it doesn’t just end there. You must also know how much it costs to sell a house without an agent. Undoubtedly, selling your house on your own will save you the commission rate paid to real estate agents. Asides from this, you are looking at a comparable closing cost just like every other seller. Usually, the closing costs of selling a house without a realtor ranges between 1% and 7% of the final sale price.
Some fees are compulsory and cannot be evaded even if you sell your house FSBO (For sale by owner). Learning how to sell a house without an agent in LA doesn’t mean learning how to evade closing costs, even though you are saving on commission rates. Some of those compulsory costs include a long list of fees and taxes from everyone involved in the deal (local and state government and mortgage lenders). Asides from these mandatory costs, you might have to pay additional closing fees such as seller concessions, attorney fees, and the buyer’s agent’s commission.
Furthermore, FSBO sellers also have to pay for expenses usually included in a listing agent’s commission, like marketing costs. Overall, FSBO sellers do not save as much as you think they do. In fact, this is why only 8% sold their home without a realtor in 2020.
Some FSBO Closing Costs You Should Know
According to the National Association of Realtors, the average agent commission is 5.8%. Although the percentage may vary from market to market, this value speaks volumes about what realtors go home with at the end of every deal. Additionally, the listing and buyer’s agent share the commission at closing.
The caveat to this commission is that if you sell your house FSBO, you will save on the listing agent fee and not the other. Suppose your property is sold to a buyer whose interests were represented by an agent. In that case, you are still bound by the books to pay the buyer’s agent commission (2-3% of the sale price). This is because this cost is often paid for by the seller.
Closing costs without a Realtor
There is a long list of closing costs every seller is saddled with. Whether you sell with or without an agent, every seller pays these costs. Although the costs may vary from state to state, it is usually between 1% and 3% of the sale price. And that’s without accounting for the agent commission. Some of the closing costs you will have to pay are;
1. Escrow fees
Often split between the buyer and the seller. Escrow fees represent the property taxes paid upfront to the lender to hold for a fixed time in escrow. Escrow fees account for about 1-2% of the final sale price, so it can either be 0.5% or 1% for each party involved.
2. Title fees
This is the money paid to confirm that you are who you say you are as a seller. These fees are paid for a title search to verify your identity and without any conflicting liens. Depending on the sale price, title fees can be as high as $1500 and low as $300.
3. Reconveyance fees
A Reconveyance deed is the money paid to confirm you have paid off your mortgage. Once you clear all your mortgage, a reconveyance deed will be issued to you. Reconveyance fees are one of the cheapest fees to be pad, and it ranges between $50 to $65.
4. Recording fees
Like the reconveyance fee, this is also a cheap one to pay. In fact, both the reconveyance fee and recording fees are linked. Because once you obtain a reconveyance deed, you must ensure it is recorded at the county recorder’s office. While some cities include recording fees as part of the transfer taxes, some charge them separately. Furthermore, this cost is not the same everywhere, as it can be as low as %15 and as high as $60 for the first page. Additional pages cost more.
5. Transfer taxes
In a house sale, there is a change of ownership from the seller to the buyer. For this to be appropriately registered, transfer taxes have to be paid. Usually mandated by the city, country, the transfer taxes can either be a flat fee or a percentage of the sale price.
Additional Closing Costs
These are some of the things to pay attention to if you want the perfect answer to “how do I sell my house without a realtor in LA?”. Some of the additional closing costs mentioned earlier include;
1. Attorney fees
House sales by FSBO usually include the presence of an attorney at closing. So, you’ll have to pay attorney fees. This can either be by the hour or a flat fee for specific services such as preparing the closing documents.
2. Seller concessions
It’s not strange happening when buyers negotiate a financing concession. Here, the seller pays parts or all of the buyer’s closing costs. This is usually done by buyers so that by closing, they owe less in cash.
Depending on the type of property in view, lenders set limits on the seller’s concessions. For instance, the Department of Housing and Urban Development limits seller concessions for FHA loans at 6% of the sale price.
3. Mortgage pay off
If you have an outstanding loan on the property, you will have to pay it off before the deal can be completed. Usually, you will have to contact your lender or servicer to determine the payoff amount. The payoff amount is often the combination of the amount you owe and the interest incurred until the day you plan to pay your loan in full.
Alongside these, a seller might have to pay holding costs. However, your reason for choosing to sell FSBO is monetary; you need to reconsider. Based on statistics from NAR, FSBO homes sell for 11% less than homes sold by real estate agents. In addition to that, it is observed that top real estate agents help sellers sell their homes for 10% more than average. Can you sell a house without a realtor in LA? Of course, ultimately, the decision to FSBO or sell with a realtor is up to you. As much as the wheel is in your hands, our goal is to help you steer it in the right direction.