If you’ve ever sold a home before, you know how expensive it can be. Aside from the costs of preparing the house for listing it on the market, you also pay additional costs during the closing. In the end, you never receive the full amount of money you were offered for your house. However, that’s not the case when you sell to a cash home buyer.
How Much Are Typical Closing Costs?
The biggest expense at closing is the commission. It varies, depending on location, but averages about 5 to 6 percent of the sales cost. That means if you agree to sell your home for $200,000, with a 5 percent commission, you end up with just $190,000.
Then, other closing costs are deducted, totaling anywhere from 2 to 5 percent of the sales price. The costs cover taxes and fees, which can vary. So deduct another 5 percent, and you’re walking away with just $185,000 for the house you agreed to sell for $200,000.
Why Do Traditional Home Sales Charge Closing Costs?
Traditional real estate companies charge commissions to compensate their salespeople and brokers for their work. It covers the time and effort of employees as well as marketing costs and general business upkeep. Other closing costs are charged separately. They can include fees for a title search, insurance, deed recording, and taxes. You may also have to pay an attorney’s fee.
Why Don’t Cash Buyers Charge Closing Costs?
Cash home buying companies don’t charge commission or closing costs because they operate differently from a traditional real estate company. Since they buy directly from you, the seller, they don’t have to compensate sales agents–and they don’t have to pay for marketing expenses.
Most companies will also pay the other closing costs as a courtesy. Their purpose is to provide a fast and hassle-free way for people to sell their homes. A quick closing is one advantage of a cash sale.
With a traditional home sale, you can make an estimate, but you never know for sure how much will be deducted from your proceeds. That’s not the case when you sell to a cash home buyer. You walk away from closing with the full amount you were offered.
Are you selling a home in the Indianapolis area? Click here to learn how to sell without paying commissions!