Getting a house ready to sell is an exciting experience. Although you might earn a sizable profit, there are costs you need to deal with that will take away from your potential proceeds.
What are the costs of selling a home? How much you need to pay will depend on what steps you take once you put your home on the market. In this section, we’ll take a look at some of the common costs involved when selling a house.
Homebuyers pay a high amount in closing costs, which is typically 2% to 5% of the home’s sales price. Sellers should expect to pay for closing costs as well.
Cash that goes into escrow has a fee that is typically divided between the homebuyer and seller. In addition to escrow expenses, you might also need to pay a pro-rated amount of your HOA fees and property taxes.
There are also mortgage loans that allow sellers to cover closing costs for the buyer. There are many sellers who do not agree to this, especially if they’re selling a home in a seller’s market. In a buyer’s market however, you might need to agree to paying for a portion of closing costs for a prospective buyer in order for them to afford the home.
An experienced and knowledgeable real estate agent will assist you during negotiations and will help you get the best deal.
Real estate agent commissions
Real estate agent commissions take up most of the costs of selling a home. 6% of the home’s final sales price is the typical commission, which is split between the seller’s agent and buyer’s agent.
Some agents are open to negotiating the commission percentage they’ll receive. There are also agents who agree to accepting lower commissions in exchange for minimal work. Most seasoned real estate agents however, will not negotiate commissions.I am not a commission discounter. A valued Realtor is worth every penny. Moreover, sometimes the cost of listing a home is expensive and the expenses come out of the seller agent’s pocket.
Real estate agents do the heavy lifting when selling a house. They’re in charge of marketing it, hosting an open house, addressing questions about the home via phone or email, and showcasing the home to prospective buyers. While the 3% commission that goes to agents is more than fair given all of the work they do, it is still something that will take a piece of your profits.
Staging a home is one of the best ways to attract more potential buyers, which ultimately increases your chance of getting a top dollar offer.
Staging jobs are performed by professional stagers, who have the skills of top-level interior designers and are proficient in making homes brighter, cleaner, larger, and more inviting. They will know how to set the perfect mood as well, giving buyers a nice preview of what it would be like if they lived in the home.
While it’s not exactly cheap ($1,200 on average) staging is a proven way of helping a home sell faster.
Lawn care and landscaping
Curb appeal is one of the most important factors when selling a home. It’s the first thing buyers notice once they set foot on your property. Making sure your yard is freshly mowed and all trees and bushes are neatly trimmed is a great way to improve curb appeal, which in turn will help increase your home’s value and shorten its duration on the market.
The average cost of professional landscaping services is $100 to $200, but you could opt to do it yourself if you want to save more money.
You will need to perform repairs if you want to get the most amount of money for your home. It can range from simple things like leaky faucets or creaking doors, to major issues like a faulty HVAC system, but you need to make all repairs necessary to ensure you get a top dollar offer for your home.
Most buyers will also have a professional home inspection performed on your property. In case the inspector discovers any issues that need to be addressed, you will be required to complete these repairs prior to closing.
In case there are existing problems with the home’s title, title insurance will protect the buyer from any liens or issues.
While the buyer will pay for lender title insurance, the seller is the one required to pay for buyer title insurance. This can cost between $750 to $1,000, depending on the home’s purchase price.