Why do sellers pay for 95% of the fees when it comes to listing and selling their home? Who made that rule up and why is it just accepted?

Not only are sellers stuck with the majority of fees but they run a higher liability of being sued than buyers do? How did buyers get so lucky?!

So why do sellers get the raw end of the deal? For as long as I’ve been in real estate (a little over fourteen years) sellers have always paid for just about everything when it comes to selling their home. The oddest thing I find is that it’s simply not questioned and is simply accepted. Why? Sellers may be in a rock and a hard place on this because if one seller is willing to pay for more or less everything and another seller isn’t then the buyer will go with the one that is. Ahhhhh but what if the seller is willing to negotiate some of the fees and the buyer is in love with their home and only their home? They could make it work and make it fair to both parties, don’t you think?

Of course I’m talking about what happens here in Santa Clarita. It’s not that way say in San Francisco but alas we are in Santa Clarita and that is my focus. From the agent’s commission to the buyer’s home warranty sellers pay for 95% of the fees! It’s just been accepted and expected that the seller will pay for most fees and when I say most I mean MOST!

The buyer pays for his own appraisal, his own escrow fees and any processing fees from his agents brokerage. Total all together is…let’s see… average Appraisal is approximately $500.00, Escrow- depends on the purchase amount so let’s average it out to a 450K purchase price making escrow fees approximately $1300.00 and Brokers processing and filing fees usually run approximately $350.00. Totaling a whopping $2150.00. Of course this doesn’t include the buyer’s loan fees but you certainly wouldn’t expect the seller to pay for those as well, now would you?

Now let’s take a look at Mr. Seller based on the same purchase price as Mr. Buyer. Commission at 6% on a 450K priced home = $27,000, Escrow Fees approximately = same as buyer $1300.00, Title Fees for the buyer approximately = $1400.00, Natural Hazards Report = $125.00, HOA Transfer Fees Approximately = $350.00, Home Warranty for the buyer runs approximately = $500.00, County Transfer Tax approximately = $495.00. Totaling a whopping $31,170.00! If that’s not the seller getting the raw end of the deal I don’t know what is. Hmmmmm just doesn’t seem right.

Now I didn’t include the escrow pad, wire transfer, overnight fees, retro fit fees, city transfer tax, (we don’t have that here in Santa Clarita) demand to payoff fee, archive fee, 593 regulatory fee or termite inspection fee. Those fees vary depending on the escrow company and some simply don’t apply to residents of Santa Clarita. If you’re curious the answer is yes, the seller pays for most of those as well!

The only thing that is not negotiable for the seller to pay for are the HOA Documents. Everything else is negotiable but is expected for the most part to be paid for by the seller. Am I the only one who finds this a bit crazy? Why doesn’t it bother anyone else?

The termite inspection fee and termite repair costs are a very interesting topic. Until as recently as December 2015 it was assumed the seller would pay for the inspection and the repair of any termite damage. It was then argued that how can you expect the seller to pay for something when they don’t know the extent of damage or cost to remedy the damage. Today it isn’t even included on the purchase contract unless the agent writes it in. It’s decided on the Request For Repairs instead. Even so, it is still expected the seller will pay for both.

Sooooooo why do sellers get the raw end of the deal when trying to sell their home? I asked several veteran agents and all of their answers were the same, “It’s always been this way and it’s what the buyers expect.” Well, things will continue to always be the same if you don’t make the change yourself. One of the main ingredients when it comes to buying and selling real estate is the art of negotiations. You can’t negotiate if you don’t put it out there to the other party.

So the next time you’re thinking of selling your home, ask yourself what will and what won’t you pay for? The decision is yours to make.

I hope you enjoyed my real estate tip of the week and if you have any questions, concerns, wants or needs regarding real estate please don’t hesitate to contact me. I’m here to help.

Tracey Hampson
Century 21 Troop Real Estate
License 01429142
Phone 661.993.6124
Thampson@Troop.com