A home sale generates hundreds of thousands of dollars. Even with the high sale prices and potential capital gains, everyone wants to maximize profits. While you don’t want to spend money that doesn’t provide a return on investment in the final sale price, don’t hesitate to put the right money into your home. Save money in some places to spend in others. Here are some ways to save money when selling your home in Northwest Arkansas.
For Sale By Owner
The biggest way to save thousands of dollars is to sell your home on your own. A real estate agent can charge 6 percent or more. This amount is split between the buyer and seller’s brokerages. And it all comes out of the seller’s profit.
Doing the math, this adds up. For every $100,000 of the sale price, $6,000 goes towards commission. For a $300,000 home, this is $18,000. That’s a lot of money especially if you are trying to maximize profits to pay down debts and get into a new home.
Selling the home on your own will reduce this fee. You might not be able to eliminate the buyer’ s agent’s commission, but saving $9,000 out of $18,000 is a hefty sum. If you are planning on doing a “for sale by owner,” make sure you understand Arkansas real estate laws and have resources to draw up the transaction contracts. If you don’t, saving on the commission could cost you in legal fees.
Also, beware of lowball offers from Buyers who expect you to lower the price by that amount (3-5%) or more. Investors (for example) prefer to deal with owners directly in order to dig into your motivation for selling, and then try to negotiate the price lower accordingly. Many FSBO properties actually profit less than they would have made with a traditional sale, believe it or not.
Negotiate With Agent
Assuming you don’t want to take on selling your home on your own, you do have another option. Agents are able to charge a wide range of commission fees, depending on their brokerage. That’s right! 6-7% is a request, not a requirement. Keep in mind that most agents have brokers who take a chunk and marketing costs they pay upfront to sell your home, so don’t expect them to work for free. But you can often negotiation between a 1-2 percent reduction in agent fees, depending on the work you’re asking them to perform.
One way is if your agent also represents the buyer. Of course, the buyer needs to agree and have complete autonomy to choose who they wish as an agent. But if the stars align and this happens, you can justify the commission reduction because the agent isn’t splitting it with anyone else. Of course, he does more work, so you can’t drop it down to half, but you can get it down considerably often by just asking.
Even if the agent isn’t working for both, start the process of hiring an agent by saying you don’t want to pay their full, normal commission. Some agents may be able to limit their services, or do less marketing, especially if it’s a hot market and they feel the process will go quickly. That could be as much as $1,000 for every $100,000 in sale price.
Do the Work, But Not All of It
Save money by not doing everything everyone tells you to make the home shine. Pick and choose what makes the home look clean, decluttered and fresh. Do the work yourself where possible. Remove and paint kitchen cabinets and replace the hardware – it doesn’t need to be expensive new hardware either. Stage the home with your furniture-saving on that cost.
Weed the yard and take the time to do the deep clean yourself to save on hired laborer costs. If there is something that you can’t do, hire someone but only if you know it will yield you more in a sale than it will cost you to do.