When it comes to buying or selling a home, from a financial perspective, there’s more to think about than just the home price. There are a variety of fees associated with a real estate transaction—and, as a buyer or seller, it’s important to understand which of those fees you may be responsible for during the process. For instance, overlooking these costs can add thousands of dollars to your expenses unexpectedly, so budgeting ahead and negotiating strategically can make a significant difference in your bottom line.

Agent commission: Real estate agents make a commission off of every home sale; while commissions vary by agent, they’re often a percentage of the total sale price—a percentage that is then split between the buyer’s and seller’s agent. (So, for example, if the commission is 5 percent on a $400,000 home, that’s $20,000 total, with $10,000 typically going to each agent.) Generally, the sellers pay this fee when it’s subtracted from the proceeds of their property sale at closing. However, commission is always negotiable, and in today’s market, many sellers successfully lower the rate or structure it differently to save money.

Closing costs: Closing costs cover a variety of fees (like loan processing, title company, appraisal, title insurance, and government recording fees) that are due at closing—and generally run between 2 and 7 percent of the home’s purchase price. For a $400,000 home, that could mean $8,000 to $28,000 in total fees. Depending on the home sale—and the negotiating skills on either side—these costs may be covered by the buyer, the seller, or a combination of both. Sellers often offer to pay a portion as a concession to attract buyers, especially in a competitive market.

The Takeaway:

Agent commission: Real estate agents make a commission off of every home sale; while commissions vary by agent, they’re often a percentage of the total sale price—a percentage that is then split between the buyer’s and seller’s agent. (So, for example, if the commission is 5 percent, 2.5 percent would go to the buyer’s agent, and 2.5 percent would go to the seller’s agent.) Generally, the sellers pay this fee when it’s subtracted from the proceeds of their property sale at closing. However, commission is always negotiable—don’t hesitate to discuss options with your agent early on.

Closing costs: Closing costs cover a variety of fees (like loan processing, title company, and insurance fees) that are due at closing—and generally run between 2 and 7 percent of the home’s purchase price. Depending on the home sale—and the negotiating skills on either side—these costs may be covered by the buyer, the seller, or a combination of both. Understanding these upfront allows you to negotiate effectively and avoid surprises at the closing table.

We make sure our clients’ experience buying or selling their home is informed and stress-free, including clear guidance on fees and costs. If you’re interested in a hassle-free real estate experience, please get in touch today: Kevin and Jennifer Hanley, REALTORS 904-515-2479 The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside www.HanleyHomeTeam.com