As a consumer, your costs are an important part of the real estate transaction. Real Estate Agents provide a service that is commission based. Because of that, they are only paid when a transaction is completed. Most transactions involve two real estate agents: one representing the seller and one representing the buyer. When sellers hire a listing agent to sell their house, they agree to pay a fee to that agents office based on the final sales price of their home. Often times another selling agent actually brings a buyer who writes an offer on the house.  If this occurs, then the listing office will split their commission with the selling agents office.  The Commissions are paid to the Listing agents office then the Listing office splits the commission with the selling agents office.  The listing and Buyers agents are paid by their respective Listing and selling offices.

6%

Is split between the listing office and the Selling office.

Then the listing office pays the Listing agent and the Selling

 office pays the Selling Agent

As your Listing agent, I will mobilize the entire real estate community.

As a buyer, hiring a real estate agent to represent you is free in the sense that you do not pay their commission, the sellers do. If you are a seller and hire me to represent you, then you will typically pay a fee of six percent of the sales price to Village Real Estate Services. By law, all real estate commissions are negotiable from company to company, but the fee that Village Real Estate Services charges is six percent.

While REALTORS® do the majority of the work in facilitating a transaction, there are other professionals invovled and therefore other costs involved as well. Below is a breakdown and explanation of fees that buyers and sellers can usually expect to encounter. These are all estimates and can vary from transaction to transaction. Contact Bobby Cochran to find out your exact costs pertaining to your transaction.

Definitions

Appraisal - Lender's will almost always require an appraisal to be completed on the property before issuing a loan. This ensures that the property is actually worth the amount of money they are loaning to the buyer. An appraisal often costs about $300.

Attorney's Closing Fee - By law, all real estate transactions must be closed by an attorney. This is a fee that is charged by attorneys for their time. Typically the fee is between $175 and $250.

Brokerage - This is the percentage paid to the listing real estate agent (Village Real Estate Services charges six percent).

Credit Report - This is a small cost, usually $15 to $30 charged by the lender to the buyer for running a credit report in order to qualify the buyer for their loan.

Document Preparation - This is a fee that is charged by most title companies. It ranges from $50 to $75.

Down Payment - The amount of cash that you put down (don't finance) towards the purchase of your house. Typically 5% of the purchase price is the least you can put down on a conventional loan and 3% is the least you can put down on an FHA loan. There are, however, grant and loan programs available that can allow buyers to purchase a house with little or nothing down.

Home Warranty - A Home Warranty is an option for buyers (and sometimes sellers) when buying a home. The cost of the warranty can be borne by either the buyer or the seller, depending upon how it is negotiated in the contract. A warranty usually costs between $260 and $400 depending upon the deductible and coverage.

Homeowner's Insurance Policy - This is usually required in order to obtain a loan. Most insurance companies give a reduced rate for bundling homeowner's insurance with automobile insurance, so try contacting your automobile insurance carrier to inquire about homeowners insurance rates. Oftentimes the first year of this policy must be paid in one lump sum at closing.

Loan Fee (Points) - This is a fee that some lenders charge in order for you to receive a lower interest rate. Some buyers prefer to "buy down" their interest rate by paying points, but it is not always necessary. Discuss points with your lender in order to find the best option for you.

Prepaid Interest - When you close on your property, you pay the interest for the remaining days of the month up front. In essence, you're paying the rest of the month's mortgage up front. Some buyers prefer to close at the end of the month to avoid paying this expense as part of their closing costs, however, if you close at the end of the month, the normal interest that accrues for the next month will be built into your mortgage payment, so you're really not paying anything extra by closing earlier in the month. It's simply a matter of preference.

Pre-Payment Penalty - Some loans have a penalty fee if you payoff the loan before a certain date. Therefore, if you're thinking of selling your house, you want to make sure you know what this figure is. Check with your current mortgage company to see if you have a pre-payment penalty.

Property Tax Proration - As logic would have it, the person who owns the home pays the property tax. If a seller sells his or her home in the middle of the year (July, for instance), then they are only responsible for paying property taxes on the house from January through July. After that, the buyer is responsible for keeping the property taxes paid.

Repairs - Repair costs are incurred by the seller if the buyer has an inspection that uncovers problematic or broken items in the house. This is an area that is extremely negotiable and therefore costs can vary.

Termite Inspection - In order to close, a clear termite letter is usually required. This inspection is paid for by the seller and costs between $55 and $80 (assuming there is no evidence of wood destroying insects).

Title Insurance Policy - A title insurance policy is purchased to ensure the title on the property is free from any liens. In Davidson County, this cost is traditionally endured by the seller (except in New Construction, where it is typically paid by the buyer). To calculate this task, take 0.1% of the purchase price and multiply it times $5.00. Then add $100 to the final figure. For instance, if a house cost $200,000, you would multiply $200,000 x 0.1 = 200 x $5 = $1000 + $100 = $1100. A buyer also purchases a Title Insurance Policy, but since it can be issued simultaneously along with the seller's policy, they only pay $35 (again, except in New Construction where the costs are paid by the buyer).

Contact Bobby Cochran

Village Real Estate Services

2206 21st Avenue South 

Ste. 200 Nashville, TN  37206

Phone: 615-363-6964 OFFICE         615-406-6667 CELL

Email: 

 1031 Tax Deferred Exchange