When you sell a home, I’m sure you know you do not walk away from the settlement table with the sales price in cash. There are costs to selling a home. When my clients ask me what they should be prepared for, I recommend expecting 7-9% in costs.
Real Estate Commission
The biggest and most important cost is real estate commission. The industry standard real estate commission is 6% of the sale price. The 6% is then split (3% and 3%) between the listing/selling agent and the buyer’s agent.
The biggest misunderstanding is that a seller pays 6% for an agent to take pictures and put their home on the multiple listing service or MLS. Obviously as the agent, I take offense to this but I do understand that most people think this is what they’re paying for. What the 6% includes is my utmost attention 24/7 for the next 6 months or however long it takes to get through settlement. During this time, I will help you price, stage, market, list, negotiate, explain all contracts, be available for home/termite inspections, create furniture inventory list, final walkthrough all while connecting with the buyer’s agent, title agency, and buyers mortgage lender. This is all to create a smooth transaction from start to finish.
The buyers agent receives half of the commission for bringing their buyer to your listing, and everything else above minus pricing, staging and marketing. Believe it or not, buyer’s agents usually have a bigger time commitment to their clients than listing agents. Buyer’s agents can show house after house after house before their client even makes an offer. I have clients I’ve showed 50 houses to before they bought. Some still haven’t bought! Half seems to be a lot of commission for not marketing your home but for the time they’ve put in for their client, sometimes it’s barely enough.
Transfer Tax
Realty Transfer Tax fee is 1% of the sales price for NJ residences, or 2% for non New Jersey residences. It’s a standard state tax for the sale of real estate. There are some exemptions to this but for everything in Ocean City, there is a transfer tax. If your primary residence is in NJ, the fee s 1% of the sales price. If you have a primary home in PA, then you will pay a 2% tax.
Title Fees & Costs
When you sell a house, you have to use a title agency to complete the transfer of ownership. The seller actually pays more costs for title insurance, searches, etc. As the seller, you simply pay a settlement fee and a deed prep to transfer ownership to the new owner. Your total title costs are around $500 or less.