If you are a first time home seller, you may be under the impression that you will get to pocket most of the money you make from the sale of your house. Unfortunately, it is a little more complicated than that. There are multiple costs of selling a house that will decrease the profit you make from the sale.
To better prepare to sell your home and know what to expect after settlement, these are the true costs of selling a house.
Preparing the House for the Market
Before you put your home on the market, it’s important to make it look sellable. This may mean putting in some extra money to make it attractive to potential buyers.
Repairs – It’s time to get out that “honey-do” list you’ve kept tucked away in the drawer for months. Now is the time to do those little repairs you’ve been meaning to get to on the weekends. That loose doorknob or scratch on the wall should be fixed before your first showing.
Cleaning – If you are serious about selling your house quickly, it’s important to keep it clean. Before putting it on the market, hire a professional cleaning service to really give your house a good scrub down. It’s the deep cleaning you’ve been meaning to do since spring!
Home Improvements – It’s amazing how simple home improvements like installing dimmable lights can increase the value of your home and wow potential buyers. To get the most money for your home, you may have to put in a little money. It doesn’t have to be a drastic improvement, just something to stick in the buyers’ mind.
Staging – Sometimes it’s recommended to hire a staging company to come in and arrange furniture or even swap out furniture before putting it on the market. These professionals will help make your home appeal to buyers in the market.
Realtor Commission Fee
One of the largest costs of selling a house is the Realtor commission fee. This fee can be negotiated between you and your Realtor before you agree to list your house with them. Don’t be afraid to shop around and find a Realtor you feel comfortable working with. Typically this fee ranges from 5-6% of the home’s sale price.
Home Inspection Repairs
The last time your home had an inspection was probably when you bought it. So, there may be some issues that come up when a potential buyer has a home inspection done that they ask you to fix. This can be handled in a couple different ways. You can hire someone to fix the issue before the settlement date and provide proof to the buyer that it was done. Or you can give the buyer a credit, which means the buyer brings a little less to the table, so they can use that money to make the repair.
Transfer Tax
One of the hidden costs of selling a house is the transfer tax that is due at settlement. This transfer tax varies depending on where you live and is a percentage of the sale price of the house. Typically, this tax is split between the buyer and the seller.
Other Closing Costs
Since every real estate transaction is unique, there may be some other costs of selling a home that come up. A good estimate for how much home sellers can expect to spend on closing costs is 2-4% of the sale price.
True Costs of Selling a House
Now that you know most of the costs of selling a house, you can more easily estimate how much you will have in your pocket to spend on your next home. Don’t be afraid to ask your real estate agent about any costs of selling a house.
About Agent Lady: Cherise Wynne is a leading real estate agent in Philadelphia, helping home buyers and sellers navigate the City of Brotherly Love, with a special focus on first time home buyers. To chat about getting started with your first time home buying experience, call 215-518-5193 or click here.
