4 ms·

Home buyers often overlook the cost of selling their home when considering if renting is cheaper. That is 6% in realtors fees and another 2-3% in closing costs.

by imbur 8y ago

Home buyers often overlook the cost of selling their home when considering if renting is cheaper. That is 6% in realtors fees and another 2-3% in closing costs. Renting is a great deal if you are not going to live somewhere for 5+ years before moving

phamilton 8y ago
> 6% in realtors fees and another 2-3% in closing costs It certainly varies by region, but in my area most realtors have been pressured down to 5% by Redfin and other competition. Closing costs (which aren't really percentage based) were between a quarter and half a percent on a $700k home.
monkmartinez 8y ago
Not only that, but by the time you are ready to sell, you will have some expenses toward the "freshening up" of the place. Paint, minor drywall repair, cleaning, curb appeal shit... etc. It all costs $$$$...
stevekemp 8y ago
This is very country-specific. I sold a flat in Scotland at the end of last year. I think I paid a flat-fee of about £2000 for a solicator to create the home-report/brochure, handle the necessary paperwork, post advert(s) online & arrange viewings, etc. I'm sure the fee was probably calculated based on the sale price, but the idea of paying 6% of the sale-price is very alien to the UK at least, and I suspect Europe too (though in Finland I've just bought a couple of places, never sold one.)
- icc97 8y ago
  The costs of buying a house in Belgium is ridiculous. It's 10% tax, lawyers cost about 5x more. If you put an offer down you're on the hook for 10% of the price if you pull out.
  - stevekemp 8y ago
    Ouch that does sound like a lot of money! I do recall that in the two Finnish places I bought my offer also had a penalty clause - if I pulled out for any reason other than "failure to find financing" I had to pay €6,000 or so. (I wouldn't have made an offer had I not intended to follow-through, but it was still a little scary to imagine having to pay out!)
    - ojilles 8y ago
      In NL that is 10% of the purchase price, and gets hold in escrow. That works out well, the sellers are most likely making a similar commitment buying their new house.
  - pcrh 8y ago
    Indeed. It's quite hard to make a profit from selling your own home in Belgium unless you have lived there for a long time. However, it appears that these extra costs are what prevents the Belgian housing market from inflating the way it does in the UK or US, eventually resulting in lower costs for both renters and buyers. A three bedroom house in a desirable suburb of Brussels costs less than a 50 sq m one-bedroom flat in an undesirable area of London.
    - trgn 8y ago
      Yup transaction costs are outrageous in Belgium. I blame it on the continued 19th century practice of upper crust families parking their more dimwitted members in civil law notary positions, guaranteeing them a respectable income without giving them the ability to cause too much harm. Seats for those offices are still getting hawked around today (expensive to claim one!). All kidding aside, yes, the high transaction costs are a real break on speculation in the housing market there.
  - stephen_g 8y ago
    That's crazy, in Australia conveyancing is pretty competitive, there are fixed price packages for something like $800 to $1200... Most contracts here do have a 10% deposit, but they're usually conditional on finance, building inspections etc. so you have two weeks or so to pull out before it goes unconditional.
simonsquiff 8y ago
6% for realtors fees is outrageous! I had no idea it was anything like that in the US. Here in the UK, it’s about 1.5%. That can often be haggled down to 1% if you have an expensive house that’s desirable enough to sell itself. And even that is getting majorly distributed by online agents, who are offering a flat fee service rather than % of property, which can be an enormous saving. At 6% it seems a market with a huge amount of fat, just asking for a new player to come and disrupt
- phamilton 8y ago
  How are buying agents compensated in the UK?
  - jstanley 8y ago
    You wouldn't typically use one.
    - quickthrower2 8y ago
      To add to this the UK market is beautifully transparent, with streets of very similar architecture / size houses or apartments to compare to. You can nail down the price you'd expect to pay, and it is very British to go in and make an offer with the agent, with no buyers agent. I didn't know such things existed until recently by watching shows like "Million Dollar Listing New York" etc.
- rhodysurf 8y ago
  You are missing that the seller pays both his realtor and the buyers realtor
  - dagw 8y ago
    Why does the buyer need their own realtor for just buying a normal house?
    - 8y ago

by imbur 8y ago

phamilton 8y ago

> 6% in realtors fees and another 2-3% in closing costs It certainly varies by region, but in my area most realtors have been pressured down to 5% by Redfin and other competition. Closing costs (which aren't really percentage based) were between a quarter and half a percent on a $700k home.

monkmartinez 8y ago

Not only that, but by the time you are ready to sell, you will have some expenses toward the "freshening up" of the place. Paint, minor drywall repair, cleaning, curb appeal shit... etc. It all costs $$$$...

stevekemp 8y ago

This is very country-specific. I sold a flat in Scotland at the end of last year. I think I paid a flat-fee of about £2000 for a solicator to create the home-report/brochure, handle the necessary paperwork, post advert(s) online & arrange viewings, etc. I'm sure the fee was probably calculated based on the sale price, but the idea of paying 6% of the sale-price is very alien to the UK at least, and I suspect Europe too (though in Finland I've just bought a couple of places, never sold one.)

icc97 8y ago
The costs of buying a house in Belgium is ridiculous. It's 10% tax, lawyers cost about 5x more. If you put an offer down you're on the hook for 10% of the price if you pull out.
- stevekemp 8y ago
  Ouch that does sound like a lot of money! I do recall that in the two Finnish places I bought my offer also had a penalty clause - if I pulled out for any reason other than "failure to find financing" I had to pay €6,000 or so. (I wouldn't have made an offer had I not intended to follow-through, but it was still a little scary to imagine having to pay out!)
  - ojilles 8y ago
    In NL that is 10% of the purchase price, and gets hold in escrow. That works out well, the sellers are most likely making a similar commitment buying their new house.
- pcrh 8y ago
  Indeed. It's quite hard to make a profit from selling your own home in Belgium unless you have lived there for a long time. However, it appears that these extra costs are what prevents the Belgian housing market from inflating the way it does in the UK or US, eventually resulting in lower costs for both renters and buyers. A three bedroom house in a desirable suburb of Brussels costs less than a 50 sq m one-bedroom flat in an undesirable area of London.
  - trgn 8y ago
    Yup transaction costs are outrageous in Belgium. I blame it on the continued 19th century practice of upper crust families parking their more dimwitted members in civil law notary positions, guaranteeing them a respectable income without giving them the ability to cause too much harm. Seats for those offices are still getting hawked around today (expensive to claim one!). All kidding aside, yes, the high transaction costs are a real break on speculation in the housing market there.
- stephen_g 8y ago
  That's crazy, in Australia conveyancing is pretty competitive, there are fixed price packages for something like $800 to $1200... Most contracts here do have a 10% deposit, but they're usually conditional on finance, building inspections etc. so you have two weeks or so to pull out before it goes unconditional.

simonsquiff 8y ago

6% for realtors fees is outrageous! I had no idea it was anything like that in the US. Here in the UK, it’s about 1.5%. That can often be haggled down to 1% if you have an expensive house that’s desirable enough to sell itself. And even that is getting majorly distributed by online agents, who are offering a flat fee service rather than % of property, which can be an enormous saving. At 6% it seems a market with a huge amount of fat, just asking for a new player to come and disrupt

phamilton 8y ago
How are buying agents compensated in the UK?
- jstanley 8y ago
  You wouldn't typically use one.
  - quickthrower2 8y ago
    To add to this the UK market is beautifully transparent, with streets of very similar architecture / size houses or apartments to compare to. You can nail down the price you'd expect to pay, and it is very British to go in and make an offer with the agent, with no buyers agent. I didn't know such things existed until recently by watching shows like "Million Dollar Listing New York" etc.
rhodysurf 8y ago
You are missing that the seller pays both his realtor and the buyers realtor
- dagw 8y ago
  Why does the buyer need their own realtor for just buying a normal house?
  - 8y ago