Traditional home sales in Rhode Island can be extremely expensive, including far more than the commission or financial burden of surprise repairs. On the other hand, a direct sale to I Buy Your House will eliminate all costs. Read on for a rundown on the surprising costs associated with working with traditional agents.
Commissions and Fees
Real estate agents are paid based on a percentage of the sale price. Usually, commissions are 3% per side, along with traditional seller’s closing fees and other possible transaction fees to the closing agent and their office.
The costs can add up very quickly, your listing agent will usually add on fees for advertising the property. This may very well include the costs for professional 360-degree images and drone footage for a virtual walkthrough. There are also costs associated with traditional advertising your property on online media platforms. Real estate agents who are active will likely place ads in local weekly or monthly publications.
When using a real estate agent, the buyer’s agent almost always orders an inspection of the property. Along with this additional cost, traditional home purchases usually require qualifications from banks, mortgage underwriting time, property inspection time and the buyer may not end up qualifying.
Repairs and Maintenance
Along with large investments like your home come repair costs. Not to mention the regular maintenance required for general upkeep. Additionally, expect investments in the exterior, such as landscaping and special touches for superior curb appeal when your home is listed with a traditional real estate agent.
Staging and Utilities
Often real estate agents will suggest you bear the costs of staging your home for showings. They’ll also want you to leave the lights on and you certainly don’t want your potential buyers shivering in the cold or sweating as they walkthrough. This means you’ll also be burdened with keeping your utilities on during the duration of the listing. As you may well be aware, there is no guarantee the home will sell quickly, if at all.
Buyers may find something they don’t like about the home or neighborhood. Under most traditional real estate contracts, a buyer could sue you if they feel there wasn’t full disclosure or facts were misconstrued, even if the issues were unknown to you. You could be facing legal costs as well.
Closing costs are generally fixed in nature and average about 2% of your selling price. These costs can include transfer fees, mortgage processing fees, escrow fees, or notary fees. Tax prorations between the buyer and seller at closing, which could add thousands to the expenses you’ll pay at closing. This expense varies depending on the time of the year you sell your home, the local tax assessments, water or sewer bills, any HOA fees or escrow item. Naturally, you’ll also owe any remaining mortgage debt.
Direct buyers in Rhode Island already know the state of the property and will usually purchase homes as-is. As a seller, this eliminates repairs before closing or any other additional expenses you weren’t planning on. There are some companies that don’t require inspections which makes it a truly as-is transaction. They typically close faster than traditional home buyers saving you the monthly expenses of listing. Direct buyers may not charge transaction fees; if they do, they’re low in comparison to the commission or closing costs you’d have to pay otherwise. They also provide mail-away closings which can make the entire process a breeze.