How Much Does It Cost to Sell a Home on Average?
Are you wondering “how much does it cost to sell a home”? If so, you should check out our guide on what you can expect…
Are you a homeowner wondering how much it will cost to sell your home? You have a valid question. Buying a home will be the most expensive purchase of your life, so you should expect it will also cost you to sell. Even if you make a profit on your home's sale, there are some associated costs you can't avoid.If you're asking: "how much does it cost to sell a home?" you came to the right place. Read on for the full breakdown.
Real Estate Agent Commission Fees
When you're in the process of selling your home, a lot of the credit goes to your real estate agent. Your agent will oftentimes work around the clock answering emails, taking potential buyers on showings, and bringing offers to you.Because real estate agents help ensure you find the right buyer, they deserve their payout when you finally close on the home. The realtor's commission is one of the highest expenses you will have to pay when selling your home. In most home sales, the seller ends up paying between 5 to 6 percent of the sale price. For example, if you sell your home for $350,000, you could end up paying $17,500 for the realtor's commission. The commission gets split between the seller's agent and the buyer's agent.There are instances when you can negotiate a lower commission if the home sells quickly, for example. It's worth having a conversation with the real estate agent before hiring them to sell your home. Some sellers want to avoid paying the realtors commission, so they decide to sell by owner. However, selling the house yourself means you will have to do the grunt work of a real estate agent such as showings, negotiating, getting a lawyer to draw contracts, and taking care of transferring the title.
Costly Home Repairs
You know all of those home repairs you have been putting off, putting your house on the market might force you to take care of them. Not only will it make your home more attractive to buyers, but it will also raise the value of the property.If you don't have large projects to complete, it might be as easy as mowing the lawn, planting some flowers, or adding a coat of paint on the walls. These small changes will not set you back a lot of money but will have a significant impact.Large improvements, however, can really set you back significantly. For example, a full kitchen remodel can cost between $12K to $35K. Although a newly remodeled kitchen can add 10 percent to the property value, you should decide if you can afford to take the risk.Some buyers might also suggest you repair certain things before closing on the home.
Home Inspections
Although home inspections are not required, they might give you some advantages if you get your house inspected before putting it on the market. Keep in mind that home inspections will set you back at least $400. If you get a home inspection, you might be able to get a head start before the buyer learns about some of the issues. When a buyer learns that there are some issues with the house, it gives them the opportunity to request a price reduction or even walk away from the deal.
Home Staging
Buyers like to envision themselves living in the property when they tour a house for sale. Even if you love your decor and personal style, it might not sit well with a potential buyer. Buyers have a more difficult time envisioning living in a home when the house has a lot of personal touches. In order to enhance the best features of your home for potential buyers, your real estate agent will recommend that you have the home staged. Professional stagers bring everything from accent carpets, couches, beds, wall art, and more. Although staging costs depend on the size of the home, you can expect to pay between $300 to $600 per month.
Monthly Expenses and Utilities
If you move out of your home before you sell it, chances are you will still need to pay for some utilities. You will want to leave all of your utilities on so that potential buyers can tour the home. Depending on the property, you might also have to pay for HOA fees, landscaping, and more.
Mortgage Fees
Once you sell your home, pay the realtor's commission, and other fees, you can pay off your mortgage. Keep in mind that even if your mortgage statement shows an amount, you might end up owing a little bit more. Check with your mortgage company to ensure you don't have any prorated interest not shown on the statement. Depending on your mortgage, you might also have a prepayment penalty.
Closing Costs
Before you hand off the keys to the buyer, you will have to go through the closing, which also means closing costs. Although the buyer typically pays most of the closing costs, you will still have to cover some of them. The most common closing costs include property taxes, attorney fees, homeowners association fees, title insurance, and transfer taxes. Expect these fees to range between two to four percent of the sale price.
Capital Gains Tax
When you sell your home and make a profit, you will have to report the income as a capital gain on your tax return. You should talk to your tax preparer to see which tax breaks you qualify for. For the most part, most homeowners can exclude up to $250,000 of profit ($500,000 if married and filing jointly) if they didn't use any other tax breaks in the last two years. You can discuss with your tax preparer to see what you can do about your capital gains.
How Much Does It Cost to Sell a Home? Now You Have a Baseline
How much does it cost to sell a home? Now you have a better idea of all the costs you're responsible for as a seller. As a seller, you will have to pay to the agent's commission, repairs, capital gains tax, staging costs, and more. Are you ready to take the next step and sell your home? Let PalmerRealty hep you. Contact us today.