You want to sell your house and you’re looking forward to putting some money in your pocket. But did you realize that selling your house may mean you have to PAY money? In this blog post, we break down what are the different fees paid to agents versus paid to investors…
What Are The Different Fees Paid To Agents Versus Paid To Investors?
It’s true… selling your house can sometimes mean that you have to pay. This isn’t always the case, but it often is. We want you to know about the different fees you have to pay because this information may help you decide whether to work with an agent or to sell your house directly to an investor.
Agent Fees
Understanding Agent Fees
An agent is a salesperson, and they will try to find a buyer to buy your house. In order to do this, they will list your house in a listing service and use various marketing efforts to try and find a buyer. While this can be effective, it often comes with several associated costs that you, as the seller, need to cover.
Commission Fees
The most significant fee you’ll end up paying to an agent is their commission. If they successfully sell the house, the commission is typically around 6% of the sale price. For example, if your house sells for $100,000, you would pay approximately $6,000 in commission. This fee compensates the agent for their time, effort, and expertise in marketing and selling your home. It’s important to note that this commission is usually split between the buyer’s agent and the seller’s agent, but it still comes out of your pocket as the seller.
Additional Fees
In addition to the commission, there may be other fees you have to pay as well. These might include different advertising fees or other costs associated with selling your house. For example:
- Listing Fee: Some agents charge a fee to list your house on the Multiple Listing Service (MLS), which is a database used by real estate professionals to share information about properties for sale.
- Marketing Costs: These can include professional photography, virtual tours, online advertisements, and print materials. Effective marketing is crucial for attracting potential buyers, but it adds to the overall cost of selling your home.
- Brokerage Fees: Some agents are affiliated with larger real estate brokerages that charge additional fees for their services and support.
- Signage: There might be a fee to place a “For Sale” sign in front of your house, which helps attract local buyers.
- Title Company Fees: These can include fees for title searches, title insurance, and closing services. Title companies play a vital role in ensuring the transfer of ownership is legal and binding.
Transparency with Agents
It’s important to ask the agent about all potential fees upfront. A reputable agent should provide a clear breakdown of their commission structure and any additional costs you might incur. Understanding these fees will help you make an informed decision about whether working with an agent is the best choice for you.
Investor Fees
Understanding Investor Fees
This is the part that surprises most house-sellers: for most investors, there are rarely any fees to cover. Investors will usually take care of all fees associated with selling. This can be a significant advantage for sellers who want to avoid the numerous costs associated with traditional real estate transactions.
No Commission Fees
One of the biggest benefits of selling to an investor is that there’s no commission to pay because they’re not agents, so they’re not listing your house. This means you keep more of the sale price in your pocket. The absence of commission fees can make a substantial difference in your net proceeds from the sale.
Covering Closing Costs
You might be responsible for closing costs, but this depends on the investor, so make sure you ask the investor who pays for those costs. Many investors are willing to cover closing costs as part of their offer, further reducing the financial burden on the seller. These costs can include title searches, title insurance, and other fees associated with transferring ownership.
Quick and Easy Transactions
Investors typically buy properties “as-is,” which means you won’t have to spend money on repairs or updates before selling. This not only saves you money but also time and effort. By selling to an investor, you can avoid the hassle of preparing your home for the market and dealing with the uncertainties of traditional buyers.
The One “Fee” You May Not Be Thinking Of
Hidden Costs of Working with Agents
There’s one more cost (“fee”) that you might not be thinking of: when you work with an agent, they’ll get you to fix up your house and then you’ll have to pay bills and taxes for as long as it takes the agent to find a buyer. So although this isn’t a fee to the agent, it’s a cost you’ll have to pay because of the agent… yet when you sell the house to an investor, they buy quickly so you end up saving this cost as well.
Ongoing Expenses
When selling through an agent, the longer your house stays on the market, the more you’ll have to pay in ongoing expenses. These can include:
- Mortgage Payments: If you’re still paying a mortgage on your home, you’ll need to continue making those payments until the sale is finalized.
- Property Taxes: You’ll be responsible for paying property taxes for the duration that you own the home.
- Utilities: You’ll need to keep the utilities on while your house is being shown to potential buyers. This can add up, especially if it takes several months to sell.
- Maintenance: Regular maintenance and upkeep are necessary to keep the property in good condition while it’s on the market.
Avoiding These Costs with Investors
When you sell to an investor, they typically close quickly, often within a week or two. This rapid turnaround means you can avoid many of these ongoing expenses. You won’t have to worry about making additional mortgage payments, covering property taxes, or paying for utilities and maintenance for an extended period.
Making the Right Choice
Weighing Your Options
So what’s right for you? It depends on how much you’re willing to pay and how quickly you need to sell. If you’re comfortable waiting for the right buyer and covering the associated costs, working with an agent might be the best choice. However, if you want to sell quickly and avoid the hassle and expense of repairs, marketing, and ongoing bills, selling to an investor can be a great option.
Why Choose Us?
At 24 Hour Cash Buyers, we pride ourselves on providing a hassle-free selling experience. We buy houses in Toronto quickly, often within 7 days, and we cover most of the associated fees. You won’t have to worry about commissions, listing fees, or making repairs. Our goal is to make the selling process as smooth and stress-free as possible for you.
If you want to go over this in more detail or confirm that we won’t charge you any fees if you sell your house to us, please get in touch and we’ll be happy to walk you through it. We are committed to transparency and ensuring you have all the information you need to make the best decision for your situation.
Contact Us Today
Ready to sell your home quickly and without hassle? Contact us at 24 Hour Cash Buyers to learn more about how we can assist you with a smooth and efficient sale. Let’s make your home-selling experience as seamless and profitable as possible. Reach out to us today!
References
- Government of Canada. (n.d.). Real Estate – Buyer’s and Seller’s Guide. Retrieved from Government of Canada Real Estate Guide
- Wikipedia. (n.d.). Owner Financing. Retrieved from Wikipedia – Owner Financing
- Ontario Real Estate Association. (n.d.). Seller Financing. Retrieved from OREA Seller Financing Guide