Frequently Asked Questions for Home Sellers

Selling a home can be a complex process, and it's natural to have questions. Here are some of the most frequently asked questions from home sellers, covering key topics like commissions, appraisals, and inspections.

Commissions

Q: How much do I pay in real estate commissions?

A: Historically, the seller paid the commission for both their listing agent and the buyer's agent, which typically totaled 4% to 6% of the home's sale price. However, with new rules from the National Association of Realtors (NAR) as of mid-August 2024, buyers are now responsible for paying their own agent's fees. This means sellers can expect to pay around 2% to 3% for their own agent. However, a buyer's agent who submits an offer on behalf of their client will almost alway ask for the seller to pay their fee of out of the proceeds of the sale. 

Q: Are commissions negotiable?

A: Yes, real estate commission rates are always negotiable. There are no fixed rates mandated by law. In addition to a percentage of the sale price, you can also discuss a flat fee or other payment structures with your agent. However, company policy may dictate what percentage their fee is. It may also vary by the services they provide and the skills/experience of the agent. 

Appraisals

Q: What is a home appraisal, and is it different from a home inspection?

A: A home appraisal is a professional assessment of your home's value, conducted by a third-party appraiser hired by the buyer's mortgage lender. Its purpose is to ensure the property's value justifies the amount of the loan. An appraisal is different from a home inspection, which is a detailed evaluation of the property's condition and a key part of the buyer's due diligence.

Q: How can I prepare for the appraisal?

A: To help ensure a smooth appraisal process, you should provide a list of major home improvements and upgrades with dates and costs. You should also ensure the home is clean, tidy, and has a well-maintained exterior. The appraiser will also look at comparable properties in the area, so a strong market with recent sales can also help your home's appraised value.

Q: What happens if the appraisal comes in lower than the asking price?

A: A low appraisal can be a hurdle, but it's not necessarily a deal-breaker. If the appraisal is lower than the contract price, the buyer may renegotiate the price, ask for a price reduction to cover the difference, or even walk away from the deal. Your real estate agent can help you navigate this situation.

Inspections

Q: What is a home inspection, and what do inspectors look for?

A: A home inspection is a professional, non-invasive visual examination of the physical structure and systems of a home, typically conducted by a licensed inspector hired by the buyer. Inspectors look for issues with the foundation, roof, plumbing, electrical systems, HVAC, and other major components. They will document any deficiencies, safety hazards, or needed repairs.

Q: Should I get a pre-listing inspection?

A: While not required, a pre-listing inspection can be a smart move for sellers. It helps you identify and address any potential issues before you list your home, which can reduce surprises, build buyer confidence, and lead to a smoother and faster sale.

Q: Do I have to fix everything the inspector finds?

A: No, you are not obligated to fix every item on the inspection report. The inspection is not a pass/fail test. After the inspection, the buyer will typically present a list of requested repairs or a request for a credit at closing. You can negotiate which items you are willing to fix or offer a credit for, or you can refuse to make any repairs. Your agent can guide you on the best negotiation strategy for your specific situation.

Jim Armstrong
Realtor
Massachusetts Real Estate Instructor