Re: I'm selling the house

[Judy Walsh <http://www.careergroup.com/~judy>]

Hi Robert,

It's not a problem, but they usually try to give you a price with 
room for negotiation and which will cover their fees.  If you get 
close to the price the realtors gave you, you are doing very well, 
since otherwise you would have to pay them 5 or 6% of the sale price. 
The contracts all say 6% but everyone negotiates it down to 5%.

I'm sure that I don't have to do the math for you, but (I'm making up 
these numbers) if you have a "profit" of $30,000 on a house for which 
you paid $100,000 (so the sale price would be $130K), the $6500 that 
you pay the realtor is 5% of the sale price but over 20% of your 
profit, before taxes. That leaves you $23500 on which you will be 
taxed.  Between state and federal taxes, you are going to pay about 
27% of your profit in long-term capital gains tax.  You also have the 
legal fees, but they are small compared to realty fees and tax. 
You're much better off doing it without a realtor if you can.

Judy