All across the state of Florida, homeowners are taking advantage of a seller’s market.
If you own a home in Florida and are considering capitalizing on the low rates and hot markets, there are a few things you may need to consider when selling your home.
What percentage does a realtor get in Florida
The way to get the highest amount for your home when selling your house is through an experienced realty agency who can walk you through the process, identify the ideal price for your house based on the current market rate, look for the ideal buyer for your house, walk them through your home during a visit, negotiate the best price for you, and do the necessary paperwork of property transfer to the very end.
The real estate agent will also take care of general marketing necessary to advertise your house in the market. That includes flyers, postcards, ads on popular real estate website like Trulia and Zillow. They also take care of organizing open-house events.
A residential realtor makes the process a whole lot easier and faster than doing it on your own. Their knowledge, experience and reach are worth their fee for homes that are worth market value.
That’s why it’s possibly the biggest cost to consider when you decide to sell your house.
The current realtor commission rate nationwide is at 6% of the selling price of your house. In Florida, the average commission rate is between 4.5% to 6.0%, averaging at 5%.
At the median home value of $233,700 in Florida, based on data from Zillow, that’s about $11,685 for realtor commission fee at 5%.
The commission you pay your agent is actually shared between your agent selling your house and the agent of the buyer. So if you’re able to agree on a realtor commission of 5%, that means 2.5% goes to the seller’s agency and the other 2.5% goes to the buyer’s agent.
House Staging Cost
House Staging is an additional service you may choose to do to get your house sold faster for more money; it’s part of the marketing effort requiring additional cost.
There are companies that do house staging consultation and services in Florida.
When you have your house staged, it ranges from initial consultation and strategy to actually having the whole service of organizing including painting and finishing done. They can even provide furniture, photography and a dedicated website inclusive of a packaged service.
Home staging service starts off at $150 for simple consultations to $5,500 for a full service with many spending between $1,600 and $2,400 a month.
The benefit of getting a house staged is that you get to sell your house 88% faster and up to 20% more money than if you don’t.
Costs also differ between a vacant and an occupied house.
To ensure the smooth transition between a house seller and a house buyer, an escrow agent is tasked to hold everyone accountable for their part of the agreement. This is the way real estate transactions are handled here in Florida.
Either the buyer or the seller can initiate the action of getting an escrow account, though it makes sense for the buyer to initiate it since it’s the buyer who provides the “earnest money” in order to assure the house seller of the buyer’s commitment.
“Earnest Money” pertains to a fund to assure the seller that in the event the agreement falls through, the seller can be covered of any expense, effort and time spent on it.
The escrow fee is typically 1% to 2% of the total house cost.
Is it worth renovating a house before selling?
Generally, renovating your home before listing it on the market will allow you to sell it at a higher price. However, there are scenarios where putting money into the home will actually cost you more than you’ll receive.
If, for example, you have little equity in the home and your balance is close to market value, it’s unlikely that your sale price will increase. In other situations, the property value is simply on the low end of the market, so you have to be very selective about how much you spend (medium vs high quality materials) because there will be diminishing returns on investment.
Now that we’ve started talking about repair and refurbishment to prep the house for selling, we need to talk about the cost of all these.
Repair is not just about painting walls and rooms and doing retouches on furniture and fixtures. It’s especially important when it comes to electrical wiring, plumbing, air conditioning and roofing. These areas are the more important aspects of repair that needs to be assessed as part of the cost to sell any house.
These are all the things a licensed home inspector does. He goes up at the attic, looks over the roof and assesses the flooring. His report also includes the condition of the house windows, doors, foundation and basement.
This is called the pre-listing inspection. It’s a recommended process to know for sure what your house needs before it gets inspected by the buyer’s inspector.
There are home inspection services in any city in Florida. The cost of a home inspection service is about $315 for a small house and $400 or more for over 2,000 square feet of the residential area. Talk to your real estate agent about getting one to look over your house.
Other than knowing what your house needs fixing in for selling, getting a pre-listing inspection ensures you’ll have fewer problems with the buyer’s inspector and be able to control the selling price better. You definitely have better recourse to sell your house at a more favorable rate when you put in the time and effort to get your house a pre-listing inspection and repair.
Covering Your Utility Bills
There will come a point in your sale’s process when you’ll have to move out to your new house, leaving the one you’re selling vacant. What do you do with the utilities?
The rule of thumb when it comes to utilities like water, electricity and gas is to leave them connected.
There are a number of reasons why.
Leaving the utilities connected helps in the process of selling though you will still have to cover for them yourself. It’s still your house until it’s not.
Working utilities allow you to do any pre-listing inspection we just talked about. Pre-listing focuses a lot on the utilities, particularly the physical condition of these connections, wiring and plumbing. They need to be working and show that they are working when the inspection happens. The buyer’s house inspection will want to see the same things.
A buyer may also require an appraiser when he needs to have financing. Appraisers will want to see your house and evaluate the condition of the property before agreeing to lend the buyer of your house. Working utilities in good condition allow the purchase to happen. A good reason to keep them on.
You’d also want to make sure any buyer who does a look-around especially during open house events would want to see your utilities working well.
And lastly, it’s a good idea to keep the utilities on for the upkeep of the house, both for its security and integrity. Keeping some lights on in the evening does prevent break-ins and burglary happening. Allowing your plumbing run especially during winter keeps the pipes from cracking from cold.
Covering for your utility bill will help keep your house in the best shape for selling. It shows your good standing, ready to hand the house over to the new buyer when he’s ready.
Covering Your Mortgage Payoff
Another cost you’ll have to keep in mind when selling your house is the mortgage payoff. Chances are you’re not done paying for your mortgage since most mortgages are spread out over thirty years to pay.
Mortgages are non-transferable unless it’s “assumable”. In which case, the person taking on your mortgage has to first qualify for the loan just as you did before you took the mortgage of your current house.
The bottom line is that you’ll still have to pay for the mortgage attached to your house.
The mortgage payoff is the amount you have yet to pay for your house. It’s the total amount including the interest. It’s not the same as the current balance that excludes interest.
To know what this amount is, you’ll need to go back to your mortgage lender and ask for this amount. They are bound by law to give it to you whenever you ask for it.
Who Pays Closing Costs in Florida?
Typically, the seller and buyer both pay part of the closing costs. The split is negotiable, and in some cases each party pays 50% of the total closing costs.
These fees are due at closing when signing the final documents to transfer ownership of the deed or property. This includes the realtor commissions, services provided during the due diligence and transactional phases, and any taxes or recording fees.
What Does the Seller Pay at Closing?
This depends on what the seller and buyer have agreed on, but the average closing costs run between 3% and 6% of the purchase price. If both parties have agreed on a split, then the seller pays their agreed-upon amount at closing.
The Documentary Stamp Tax is Florida’s Real Estate Transfer Tax, charged at 0.7% except for Miami-Dade County which is set at 0.6% for single-family residences.
Who Pays For Title Insurance? – Buyer or Seller?
When it comes to Title Insurance, it is handled by the buyer of the house. Title Insurance is provided by the Title Agency to protect the buyer against any problem that comes up in the title search on the property and it continues to protect way after the transfer of property is complete in case a claim is made against the title.
How Much Should Title Insurance Cost in Florida?
In Florida, Title Insurance premium is $5.75 for every thousand dollars of the house purchase price up to $100,000. It’s $5.00 for every thousand dollars of the house purchase price more than $100,000. This is under the buyer’s expense.
Is Title Insurance Mandatory in Florida?
Title Insurance is not required in Florida or in any other state for as long as the lender is protected with a loan insurance policy. The Title Insurance is mainly to protect the lender and secondarily the buyer but not necessarily. Therefore, it’s a requirement by the lender that the buyer needs to provide.
Do You Have To Pay Taxes When You Sell Your House In Florida?
If you do make money from selling your house, you still need to pay the Federal taxes on the profit at the end of the calendar year.
Often, it turns out the tax on your sold property is zero but make sure you file it as the cost of not filing can be pretty steep.
Other than that, it’s basically the documentary stamp tax and the annual tax on the value of the property that you do own.
What to do if you can’t sell your house on the market?
There are a lot of cases where homeowners simply can’t sell their house in the traditional manner.
This might be because they can’t afford repairs to bring it up to par, or they have issues with tax delinquency or missed payments.
If this is an issue for you, then listing the house might not be an option for you because it will take too long to sell and the amount of fees you’ll incur will leave you with little to nothing.
In situations like this, it is often best to consider working with a private buyer or investor who can give you alternatives than a normal sale.
These alternatives may include either a cash offer for the home or a form of owner financing, such as a “subject to” where the buyer simply takes over your payments so that you no longer have to make those monthly mortgage notes.
These types of deals do not require any money out of pocket. You don’t have to make any repairs or cover any closing costs or fees. And because no realtors are involved, there are no commissions to be paid out.
Be aware of the costs of selling your home
Make sure you consider all the details when selling your home. It’s not as easy as simply just selling it and being done with it. There are costs you need to be aware of because you may not be pocketing as much as you originally thought, and you don’t want to be caught off guard when it comes to expectation of funds after a real estate sale!