14 Costs of Selling a House You Should Prepare for
Selling your home can be an exciting time.
You may pocket a significant amount of cash, but the costs of selling a house will eat into your profit.
So how much does it cost to sell your home?
It depends on how you go about doing it, but here are some expenses you can expect to pay when selling a house.
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1. Closing Costs
Homebuyers pay quite a bit in closing costs, usually between 2%-5% of the sales price of the home. However, sellers can expect to pay closing costs as well.
Any money going into escrow has a fee that’s split between the buyer and seller. Besides escrow expenses, you may have to pay a pro-rated amount of your property taxes and HOA fees.
Most types of mortgage loans also allow the seller to pay closing costs for the buyer. Many sellers will not agree to this, especially in a seller’s market. In a buyers market where home sales are slow, you may have to pick up a portion of closing costs for the buyer to be able to afford the home.
An experienced real estate agent can help you negotiate the best deal on your behalf, keeping as much money in your pocket as possible.
2. Realtor Commission – 3%-6% of Sales Price
The majority of the costs of selling a home are real estate agent commissions. When you hire a real estate agent to sell your home for you, the typical commission is 6% of the final sales price.
The seller’s agent will split this commission with the buyer’s agent.
In some cases, you may be able to negotiate the commission percentage with an agent. There are discount agents who will accept a lower commission but do minimal work. However, most experienced realtors will not negotiate commissions.
There is a lot that goes into selling a house as an agent. They have to market it, host open houses, answer emails, and calls regarding the property and may show the home to some buyers. Listing agents work hard, and a 3% commission for selling your home is more than fair. But this eats into your profits.
For example: Let’s say you have a $300,000 mortgage balance, and your home sells for $450,000. $150,000 is left after paying off the remained of the mortgage loan. The real estate commissions you pay are 6%, or $27,000. Cutting your take from $150,000 to $123,000.
3. Staging – $1,500-$2,000
Staging a home is when you have a company put furniture inside the home. Staging a home before selling it has been proven to help sell a home faster. It makes the home appear larger and gives each room a purpose; buyers can see how good the home will look with furniture in it.
4. Interior Painting – $1,000-$1,500
Painting the interior walls a neutral color will add to the appeal of a home. Dirty walls and unique colors are a huge turn-off to homebuyers. Freshly painted walls give the appliance that your home has been taking care of and greatly improves the perceived value of a home.
5. Transfer Tax- U.S. Average $750
Not all cities and counties will charge a fee to transfers taxes into the new owner’s name. Usually, the transfer fee is a percentage of the sales price, the more expensive the home, the larger the fee will be.
6. Carpet Cleaning – $100-$200
Dirty carpets scream, “I need to be replaced!”. That’s extra money and another headache a home buyer doesn’t want to worry about. Cleaning the carpet, so it looks like new goes a long way in maximizing how much sell your house for.,
Carpet cleaning companies usually charge per room, which can add up. Save money by doing it yourself; steam carpet cleaners are for rent at places like Home Depot and Lowe’s for less than $50.
7. House Cleaning – $150 Average
The house should be thoroughly cleaned for the buyer before the closing day. Cleaning services for an average-sized home can cost around 150 dollars on average. If you don’t mind a little manual labor and have time on your hands, you can save money by doing it yourself.
8. Lawn Care and Landscape – $100-$200
having a freshly mowed yard and all trees and bushes neatly trimmed improve the “curb appeal” of your home. Improving the curb appeal of your home can help sell your home quicker and may help fetch you more money. Again, to save money, you can do this yourself, saving on landscaping services.
9. Lawyer Fees – $1,000
You may need a real estate attorney to oversee the real estate transaction. Attorney fees can range anywhere from a few hundred dollars to a couple thousand.
10. Title Insurance for the Buyer – $1,000
If are there are any issues with the title to the home, title insurance protects the buyer in case there are any liens or other issues.
The buyer pays for lender title insurance, but the seller is responsible for the buyer title insurance. The cost ranges between $750-$1000 depending on the purchase price of the home.
11. Mortgage Payoff
Your mortgage loan will be paid off with the money collected from the sale of the home. You will receive what is left over after all fees and costs are deducted.
12. Utilities
Even if you have moved out of the house, you’re selling. You will need to continue paying for electricity, gas, and water. A home without electricity will be a very tough sell.
13. Miscellaneous Repairs
To get the maximum amount of money for your home you’ll want to make repairs. If there are any items that are not working or something that you have been meaning to do but never did. You should make all repairs necessary to ensure you get top dollar.
14. Inspection Repairs
Most likely, the buyer will have a home inspection performed on the property. If the inspector finds any items that need to be repaired, the seller will need to pay to have repairs done before closing.
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Source: https://thelendersnetwork.com/cost-of-selling-a-house/