What is the Average Cost of Selling a Home?
Sellers, especially in a seller’s market, often don’t realize just how much they will be expected to pay for the sale of their home. A realtor’s commission is a given, but other expenses can run into the thousands. Some expenses are fixed amounts, others are variable, and the costs do add up. Often, sellers can expect to pay about 10% of the sale price when all is said and done.
Realtor’s Commission Fees
This is usually the biggest fee a seller will pay. If you employ a realtor to sell your home, you will pay 5-6% of the sale price in commission. Although this commission will be split between the buyer’s agent and seller’s agent, in over 75% of transactions, the entire commission is paid for by the seller.
A way to avoid this is to try to sell without a realtor, but less than 10% of homes are sold this way, and often the process is much longer, you may not always get the best price, and it still isn’t “free”. You’ll hire a lawyer to draw up the contracts, you’ll pay to get your home listed on websites, and you’ll find experts to help you handle all the intricacies. Doing all of this on your own will usually cost you more in the end because most of the time it will take you longer to sell, and with real estate-as with most things-time is money.
Before you list your home, you’ll want to take care of any repairs that will impact the sale. You’ll address the little things you’ve been putting off (leaky faucets, stained carpet, neglected landscaping), possibly tackle bigger cosmetic issues (interior painting, upgrading fixtures), and make note of anything that could potentially come up in a home inspection. Generally speaking, anything that would come up in the home inspection will need to be repaired by, or paid for by you, the seller. Other repairs can increase the value of your home and make your house more attractive to buyers. Depending on what needs to be done, this can end up being a major expense.
Hiring a professional to stage your home may be well worth the $400 average investment. A home stager can help you stage your home to appeal to the most buyers. A stager will help declutter and depersonalize your home so buyers can picture themselves living there. Having a professional help you is something many realtors recommend so your home will photograph better, show better, and sell faster and for the best price.
After an offer, an inspection is part of the escrow process. However, some sellers choose to do a pre-sale home inspection. This expense can run about $400. The advantage of investing in a pre-sale inspection is that it will let you know anything that could come up in the later inspection, and allow you to make the necessary repairs before the buyer has the opportunity to pull out of the sale or demand a price reduction.
The proceeds from the sale of your home will be put toward paying off your current mortgage. However, you may have fees associated with this payoff. You may have prepayment fees associated with your current loan. Contact your current lender to understand what your payoff amount will be.
Closing costs are usually the responsibility of the buyer. However, many buyers will try to negotiate closing costs into their offer as the seller’s responsibility. While this isn’t always the case, it’s good to know that the possibility is there.
Property taxes and capital gains taxes may be an expense, depending on how much your home sells for and when your property taxes are due.
Selling your home does come with a cost, and the many variables make it hard to estimate. Having a realtor to guide you through the process is the best way to guess approximately what your cost will be, and how much you can hope to profit. Contact our office today for more answers to your questions about what to expect when selling your home.