Should it cost 8 -10% to sell my rental property?

Should it cost 8 -10% to sell my rental property?

Oak View, CA · Member since 2016 · 19 posts · 3 votes

I have had one rental property in Idaho for 14 years and a second home that is an Airbnb for less than a year. I have never sold a house before so I was a little surprised to get an estimate from my agent that it would cost me upwards of 8% ($17k) to sell the home. I completely understand the value and ease that a good agent brings to the table, but at the same time, leaving that money behind will hinder my ability to move forward with scaling up into a down pmt. on a multi-family or portfolio purchase. I have read a few posts about these concerns and I get the feeling that there aren't many options available that won't leave me scatterbrained or with less money. Something tells me that 17k could easily become 20k when everything is said and done. 20k is roughly 10% of the current value of the home. Does it really cost 8-10% to sell? I applied for a heloc on the property , but my DTI was too high because of the debt on the second home and really I would just prefer to sell the home at a discount, just not 17-20k. Better options or bite the bullet?

0Reply
96 views

Most Popular Reply

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Russell Brazil:
Originally posted by @Kelly DeWinter:

 I quote people from upnest considerably higher rates than if they just came directly to me since they take a 30-35% cut.

 what I see these days is

5 to 6% total commish you will usually have about 1% your side of the closing costs and in markets were there are tons of first time buyers virtually all of them are going to ask for 2 to 3% in seller credits for closing costs.. so me personally in those markets I use 10% when running the numbers to see if it works to buy it. because I am always looking at the exit before I buy.. 

See this reply in the discussion

14 Replies

Jump to latestLatest
  • Member since 2018 · 259 posts · 159 votes
    7y

    No, 

    https://www.upnest.com/1/post/average-idaho-real-estate-agent-commission-rate/

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    7-8% is usually what I estimate for closing costs on a sale.

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y
    Originally posted by @Kelly DeWinter:

    No, 

    https://www.upnest.com/1/post/average-idaho-real-estate-agent-commission-rate/

     I quote people from upnest considerably higher rates than if they just came directly to me since they take a 30-35% cut.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Russell Brazil:
    Originally posted by @Kelly DeWinter:

     I quote people from upnest considerably higher rates than if they just came directly to me since they take a 30-35% cut.

     what I see these days is

    5 to 6% total commish you will usually have about 1% your side of the closing costs and in markets were there are tons of first time buyers virtually all of them are going to ask for 2 to 3% in seller credits for closing costs.. so me personally in those markets I use 10% when running the numbers to see if it works to buy it. because I am always looking at the exit before I buy.. 

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    @Jay Hinrichs

    I try to structure my own deals where Im getting closing help, but in general its pretty rare in my market outside the really low price points. 20% of our sales are all cash, which us actually way down from a decade ago when it was 50%. So with all the all cash no contingency offers flying around, getting closing help here for the most part goes out the window.

    Its actually pretty interesting seeing how the commissions vary throw our area. There are certain locations where all the commissions are the same number on the high end of the range, some locations where they are in the middle, and some locations on the low end. It is very geographic.

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    Call a few agents to ask about pricing for the home and what they charge and provide.  When I sold my place in BC, it was 6% on the first $100K and then a lower percentage (3.5??) on the remainder.  The only other cost (other than taxes) was my lawyer ($700).

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Theresa Harris:

    Call a few agents to ask about pricing for the home and what they charge and provide.  When I sold my place in BC, it was 6% on the first $100K and then a lower percentage (3.5??) on the remainder.  The only other cost (other than taxes) was my lawyer ($700).

    not only is BC another state but its a province and a different country.. so of course things will be different

    I have bought and sold in BC and lent money.. I really like the low flat fee's lenders and closers charge.. in the US we get totally hammered by lenders and some closers. 

  • Rental Property Investor · Chubbuck, ID · Member since 2018 · 532 posts · 466 votes
    7y

    In Idaho it will be about 7% of sales price if you don’t pay for sellers closing costs and 10% if you do.  6% is for commission and 1% is for title fees and property taxes. In Idaho you pay property taxes in arrears. You might get an agent to drop their commission by up to a percent but probably not more than that. Where is the property? I am in Pocatello.

  • Oak View, CA · Member since 2016 · 19 posts · 3 votes
    7y

    Thanks everybody for the tips. 

    @Craig Jeppesen Caldwell

  • Rental Property Investor · Chubbuck, ID · Member since 2018 · 532 posts · 466 votes
    7y
    Originally posted by @Josh Splawn:

    Thanks everybody for the tips. 

    @Craig Jeppesen Caldwell

     BOISE is hot right now so if it would be a nice family home to sell as a primary you might try listing it on Zillow first for a few weeks before you lust with an agent. 

  • Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    7y

    You interview 3 agents telling them the price you want ask them for their fees.

  • Member since 2018 · 259 posts · 159 votes
    7y

    @Russell Brazil

    A lot of Real Estate Agents quote 7 to 8% to close to sell a property, but the Truth is in this Internet age, the cost of selling a home can be drastically reduced by reducing or eliminating realtor fees. You can list a property in the MLS for as little as $499.00 have professional photos taken for 399.00 Offer a 1.5% to 2% Seller agent commission and pay depending on where you live as little as 2-3% in transfer costs.

    Anyone who chooses a Sellers agent who does not offer a "Menu of Services" or Concierge services is throwing money away IMHO.

  • Investor · ID · Member since 2019 · 41 posts · 21 votes
    7y

    Check out my brokerage, FourPointFive Real Estate Boise. We offer lower commissions (4.5% total: 1.5% to us as the listing agent and 3% to buyers) with no compromises on the value we bring. We think the current commission rates are a thing of the past as well. Let me know if you're interested! We're headquartered in Boise, but I am the East Idaho agent.

  • Oak View, CA · Member since 2016 · 19 posts · 3 votes
    7y

    I’ll check it out. Thanks again everyone!

Join the conversationCreate a free account to reply, vote on answers and follow this thread.