Selling Costs are (you guessed it!) costs you incur when you sell your property. A bulk of your selling costs will be for Agent's commissions, but there are also other miscellaneous closing costs to consider as well.
Selling Costs are (you guessed it!) costs you incur when you sell your property. A bulk of your selling costs will be for Agent's commissions, but there are also other miscellaneous closing costs to consider as well.
Calculating Selling Costs on the Flip Analyzer
The Selling Costs on Step 4 of Flip Analyzer is used to calculate the approximate Selling Costs you'll pay when you sell the property.
For your flexibility, you have 3 different options for calculating your Selling Costs:
Lump Sum
% of Resale
Detailed
Lump Sum
The Lump Sum option allows you to quickly enter a lump sum amount for the Selling Costs. For example, if you just want to quickly plug in $40,000 for the Selling Costs, you can easily plug in that value as a placeholder.
% of Resale
The % of Resale option allows you to quickly calculate the Selling Costs by multiplying a % by the After Repair Value (resale) you previously inputted into Step 1. For example, if your After Repair Value was $500,000 and you plugged in 8% Selling Costs, your Total Selling Costs would be calculated at $40,000 (8% x $500,000 = $40,000)
Detailed
The Detailed option allows you to build out an itemized list of all of your Selling Costs that you anticipate paying for the property. You have the flexibility to enter the itemized costs as a Lump Sum $ Amount or by using a % of the Resale.
FAQ
What are Typical Selling Costs & Amounts?
Typical Selling Costs
Here's a list of typical Selling Costs and average amounts that you will likely have on your rehab projects.
Buyer's Agent Commission (~3% of Sales Price) - Seller's generally pay the buyer's agents commissions which are typically 3% of the Sales Price.
Seller's Agent Commission (~3% of Sales Price) - The Seller is also responsible for paying for their Seller Agent's commission as well. Now, if you list the property FSBO or are a Real Estate Agent yourself, then you could potentially save 3% on the sales commission.
Seller Assisted Closing Costs - In a buyer's market, buyer's may ask the seller to pay some or all of their closing costs. However, in today's seller's market, you will likely not have to pay any of the buyer's closing costs.
Transfer Taxes/Excise Taxes - Some States impose Transfer Taxes or Excise Taxes on real estate transactions, so check to see if these taxes are required in your area.
Home Warranty ($400 to 500) - Generally, home buyers expect the seller to purchase a Home Warranty that covers repair or replacement of appliances, systems or components of the home for a 1-year period.
Termite Letter ($50 - 100)- Many buyers (and their lenders) also require proof of a termite inspection.
PRO TIP
Generally, Selling Costs will be around 7 to 9% of the Sales price.
