New to selling my SFH property out of state

[Cheza M.]

Hi everyone,

I hope you’re all doing well. I could really use some advice regarding selling my property in Ohio, Cleveland. A few years ago, I made the decision to invest in my first turnkey property out of state, hoping for a solid investment. Unfortunately, things haven’t gone as planned, and now I’m looking to sell.

I must admit, I’m quite inexperienced when it comes to selling real estate. I’ve enlisted the help of a property management company to assist me in the process. After a few months, we finally found a buyer, but I had to settle for less since I opted to sell the property as is to save on renovation costs.

To give you some background, I initially purchased the property for $155k. Now I'm selling it and the best offer I received was $95k, conventional with no inspection. However, I agreed to pay 3% in closing costs from my end. My remaining mortgage balance is around $94k, so you can see that I’m already facing a significant loss in selling this property.

I requested the closing documents to review all the associated fees and charges, and I was surprised to find that the out-of-pocket closing costs amount to $12,395.38. As someone new to selling property, I had expected to pay around $5k, so this figure seems quite high to me.

Also, I've already scheduled to sign the closing documents on Monday, April, 8. But I'm still a bit hesitant because of my lack of my knowledge about all of this. 

I’m reaching out to see if anyone has any advice on how I might be able to reduce these costs or if this is simply par for the course. Any insights or guidance would be immensely appreciated! Thank you all for taking the time to read this and for any help you can offer.

Attached is the image of the preliminary closing document for reference.

[Jacob St. Martin]

Quote from @Cheza M.:

Quote from @Jacob St. Martin:

Hello Cheza, 

I am sorry to hear that your first rental property didn't go well. Unfortunately these companies offering turn key rentals often over promise and do so in markets weak markets that are unlikely to see appreciation. Now to answer your question:

Based on what you sent it looks like your actual closing costs are $8,361. Everything looks correct here for me except for potentially one thing. On the right side under other costs I see the 3% commission for you agent which is fine, but then I see another 3% "seller credit" on the left side. Did you agree to pay a 3% credit to the buyer? If not then your agents commission may have been added in here twice by accident. 

If you need to talk through this in more detail feel free to reach out. I feel bad when people get sucked into sub-par turn key deals when there are much better options for investing in real estate more passively like investing in syndications or being a financial partner on smaller scale deals with another investor who wants to put in the work but needs the capital (I partner with people like this). 

Hi Jacob,

Thank you for your reply. I thought the 3% credit is what I agreed to pay in closing with the buyer when he made his offer, is it not?

 There is already a line item for both your agent's commission and the selling agents commission on the right side of the page. This looks like an independent 3% credit.