Ready to sell a house?
Well, you’re not ready until you’ve factored in the total cost of selling a house. Many of these costs are small investments that you can make in order to list your home at a higher price in the end. But you’ll still need to have that money on hand in the first place.
We’ve broken down these costs by category so you can be smart and budget accordingly. Keep reading to learn all you need to know.
Repairs, Renovations, and Staging: Do or Don’t?
It might seem odd to fix up your house right when you won’t get to enjoy what you’ve done with it, but this is actually quite a common part of home sale costs. You would need to view this as an investment—that is, you would put some money into a repair or renovation in order to sell your house for a higher price.
In order to make these changes worth it, you’ll have to be smart about the process. For example, you might want to focus on repairs and basic renovations.
This is because everyone has their own taste in interior design. Fixing a hole in the wall seems like a pretty straightforward idea anyone would approve of, but anything too specific might be more impressive to you than your potential buyers.
If you don’t want to go through a lengthy remodel, you can use a service like FasterHouse for an easier route. FasterHouse does cash offers for homes in any condition.
Real Estate Agent Fees in the Cost of Selling a House
Another major investment will be the real estate agency you go with. You don’t have to have a real estate agent, but if you don’t know much about home selling, having an agent is generally a good idea.
An agent can help you sell at the right time, stay in control of negotiations, and end up with a bigger profit—even after you account for the agent’s fees.
The commission for a real estate agent will likely be around five percent of the home’s sale price. This might seem small, but it could be five figures. For example, if you sell a home for $300,000 with a five percent real estate agent commission, you would pay your agent $15,000 of that.
Taxes, Mortgage Costs, and Escrow
These fees are going to be dependent on where you live and your particular situations. Look up your local tax laws (or ask your real estate agent) to get an exact number, but you should expect to pay at least a grand in taxes alone.
If you haven’t paid off your mortgage yet, a portion of your home sales could go toward that. And the process of holding escrow money for the buyer through a third party will cost some money as well—likely at least a few hundred dollars.
What if your buyer does an inspection and finds something wrong with the house? Well, they might ask you to knock a little bit off the price so they can pay to fix whatever’s wrong.
This is called a seller concession, and you should set some money aside to prepare for this possibility. This will increase your house sale costs, but it will also keep you on the safe side when it comes to closing a deal and avoiding legal trouble.
Go Get Your Money’s Worth
The total cost to sell your home will depend on your local taxes, whether or not you decide to renovate, and where you’re at with your mortgage.
But, all in all, the total cost of selling a house will likely be in the tens of thousands (with real estate agent fees making up most of that). The good news is that when you’re selling a home, you can expect to have a pretty big pot of money soon.
And for more on everything you’ve wanted to learn about houses, check out the rest of our site!