Most consumers only buy and sell real estate as a necessity. Often times there are great periods of time between transactions so there isn’t exactly common familiarity with the procedures and protocols of how things work. Revise that: how things work down here. Odds are, the last transaction was elsewhere, in another state with different customs.
Naturally, part of the education process for buying or selling real estate is reviewing estimated closing fees. Of course, that final price for real estate isn’t the bottom line. There are additional fees charged to process real estate transactions; recording fees, taxes, title insurance, estoppels.
Maybe it’s because so much time goes between transactions that consumers are overwhelmed and feel out of sorts. That estimated settlement statement shows up with literally hundreds of lines of figures and fees. Eyes go glassy and sometimes you can almost hear the sound of static in the background.
“Yeah, but you get to buy and sell your real estate for free.” Every once in a while someone shares that fallacy when we’re going over the paperwork. I heard it again, weeks ago, and could only think to myself; I just sold real estate and it sure wasn’t “for free.” Being in “the business” didn’t provide me the fabled insider discount.
The fees and expenses on the settlement statement were not much different than what would be on your settlement statement if you were closing on a home today.
Regardless of how charming or convincing anyone could possibly be, the fact of the matter is that most of the fees on the settlement statement are actually non-negotiable.
Of course the real conversation lies with the alleged free real estate commissions. Rest assured, real estate agents who sell their own real estate also pay those. Certainly, if we’re listing our own real estate we may have the discretion of adjusting our portion of a listing fee, but we still invest the hours and advertising no different from any other listed property. It’s not a whole bunch different than a pool contractor getting supplies at cost. He still has to pay the labor (the co-broke agent) to get it installed.
The state of Florida offers its residents the gift of no state income tax but it does collect fees on real estate. Documentary stamps on a deed is just a fancy way of saying we’re taxing you on your real estate sale. Seventy cents for every one hundred dollars of that sale price and there just is no way around it.
The same goes for clerk of court recording fees, attorney fees and title insurance fees — everyone gets to pay them. When it absolutely, positively has to be there over night … shipping isn’t free, either.
Real estate agents selling their own real estate also get to contribute to buyers closing costs if that’s what it takes to get something sold and they also have to adjust the sale price when the property doesn’t appraise. Trust me, I just did it. There was no insider way around it or a way to discount any of that.
Buying real estate comes with a nearly matched set of fees and expenses, even more if there is a mortgage involved.
It doesn’t matter how long anyone is in the real estate business or who they know, they still get to pay the piper when they buy or sell real estate because nothing in life is certain except death and taxes … and the closing fees on real estate transactions.
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Chris Griffith is a real estate agent at Downing-Frye Realty Inc. in Bonita Springs. If you have a question about local real estate or Bonita Springs, e-mail her at chris@LifeInBonitaSprings.com.