REAL ESTATE April 19, 2021

The Cost of Selling a Home

 Perhaps you’ve seen the signs in front of some homes: “For Sale by Owner.” The assumption for most of us is that this seller has decided to avoid paying agent fees and is hoping to pocket those fees. Is this a good idea though?

Agents’ fees are just one of the many costs of selling a home. Let’s take a look at these and other costs you’re likely to encounter when you sell your home.

  1. Real estate agent’s fees.
    Real estate agents usually charge 5-6 percent of the home purchase price. (Be sure to ask potential agents about the commission fee. Agree on terms in writing.)  Seller’s agents are likely to split commissions with buyer’s agents, who usually don’t charge clients.

    If you’re thinking about trying to sell your home yourself, be mindful of all the things you’ll have to do and all the costs involved: marketing and signs, photography, hosting an open house, and legal representation for paperwork. There’s also the real estate agent’s extensive knowledge that helps them negotiate the best price. Are you up for all that? Having a real estate agent also opens you up to a wider pool of potential buyers by listing your home on the MLS (multiple listing services). 

  2. Property taxes.
    Sellers owe a prorated share of property taxes. That figure could run from zero to several thousand dollars, depending on the due date of the taxes. You might also face a capital gains tax, depending on how much profit you make for your home. 
  3. Mortgage payoff.
    You’ll have to pay off your mortgage but count on the payoff amount is different from the balance due listed on the last mortgage statement because of interest charges. 
  4. Title policy for a new homeowner.
    The seller sometimes pays for a new homeowner’s title policy at an average cost of $1000. Also, if a title search reveals a lien on a home, that lien should be settled before you can sell the home. 
  5. Home repairs.
    You may have to shoulder the costs of major home repairs to make the sale go through. Otherwise, you might have to discount the sale price. Another option for an older home is a home warranty, priced from $300-600 for a one-year warranty. This would cover most of the repair costs if something major breaks down after the sale.
  6. Moving costs.
    Even if you pack up your home yourself, there are still costs for materials and movers. The cost of moving will vary, but count to pay on average $1250 for a local move and $4890 for a long-distance move.
  7. Home staging.
    Let’s say your home doesn’t sell as quickly as you’d hoped. You may want to enlist the services of a professional home stager. These pros will come into your home, assess its best selling points, and advise you or else do the work themselves to present your home to its best advantage. The home stagers will not only rearrange furniture and change the interior but may rent furniture. Costs could be from $500 to $2000.
  8. Miscellaneous buyers’ costs.
    While buyers customarily pay for mortgage fees, appraisal expenses, and home inspections, the seller sometimes offers to pay some of these closing costs to seal the deal. This could add up to about 2-5 percent of the selling price.

It’s helpful when selling your home to make a list or a spreadsheet of all possible costs you’re likely to incur to avoid surprises during the selling process. A good real estate agent will also make the selling process a lot smoother.