The True Cost of Selling Your House
OpenDoor says, “While the average real estate agent commission hovers around 5% to 6%, depending on where you live, the true cost of selling your house tends to be higher. When you factor in additional costs that are common in most sales like repairs, closing costs, and relocating costs, your total expenses can come closer to 10% of the home’s sale price. There can also be a substantial investment of time as you wait for the right buyer to make an offer, qualify for a mortgage, and then close the deal.”
The True Cost of Selling Your House
Assuming you sell your house for $248,000 (the median price for a single-family home in the U.S. in 2018) you could end up paying $41,000 in total costs. The real estate commission will be most likely the biggest fee you will pay as a seller. Right off the bat, you can see that $41,000 is more than 10% of the sale price. What accounts for this larger number?
Preparing Your Home to Sell
Before listing your home, you’ll want to ensure that it’s market-ready to attract interested buyers. There are four main costs to consider as you prep your home.
- Staging costs (~1% of the sale price) – In a National Association of Realtors (NAR) survey, 29% of sellers’ agents reported an increase of 1% to 5% in the dollar value offered by buyers. Twenty-one percent reported that staging increased the sellers’ home value by 6% to 10%.
- Landscaping costs (~1%) – The outside of your home can be almost as important as the inside when it comes to selling.
- Home repairs and maintenance (varies) – As you prepare to sell, inspect your home for damaged features, broken appliances, and spaces that need to be cleaned or refreshed, and doorbells and porch lights.
- Home improvements (varies) – consider whether you want to make any renovations to the home like a renovated kitchen. A minor remodel could cost you almost $21,200 on average, according to the Remodeling 2018 Cost vs. Value Report. The upside is an 81.1% recoup of the cost at the sale.
Real estate agent commissions (~5% to 6% of the sale price)
Working with a real estate agent means they handle the selling legwork for you, such as arranging tours, scheduling paperwork, updating your listing, and arranging things like photography of the home.
You could also fly solo and sell your home without an agent, but you still might be responsible for paying commission to the buyer’s agent. You might also find that realtors shun for sale by owners which could limit your buyers.
Seller Concessions (~1.5% to 2%)
You may have to come down from your asking price or agree to pay for some of the repairs.
Closing Costs
According to Realtor.com, sellers typically pay between 1% and 3% on average at closing. If you’re hoping to sell your home for $250,000, you could potentially pay $2,500 to $7,500 in closing costs.osts (~1% to 3% of the sale price)
Transfer Taxes
According to the National Conference of State Legislatures, 12 states charge no real estate transfer tax at all. Arizona charges a flat transfer fee of $2. The remaining states have transfer taxes that typically range from 0.01% to 5% of the sale price.
Mortgage payoff
The proceeds of the sale are used to pay off your old loan, but there may be a small shortfall if the payoff amount doesn’t include prorated interest. You may have a pre-payment penalty
Buyer’s home warranty (<1%)
A buyer warranty can cost between $300 and $600, according to Realtor.com. It’s a nice perk to offer buyers, but it’s not a requirement.
Moving costs (~1% to 2%)
HomeAdvisor estimates the cost of professionally moving a three-bedroom house locally at $760 to $1,000. Movers charge more for longer distance moves and to transport heavy or bulky items, such as a piano or your kids’ swing set. Moving abroad can cost 10 to 20 times what it cost to move locally.
Relocation
Finally, it always costs something after the relocation. There are utility connection fees, new shower curtains, drapes or blinds, HOA fees, property taxes, and homeowners insurance. Transition costs may add up to about 1% of the sale price if you have to pay for two places for a while
There is another way
Many of these costs can be avoided by calling Styl Properties, Inc. who will purchase the home as-is – even if the issue is something catastrophic like fire damage or flooded home – close quickly, and do any needed repairs themselves.
FREE information on How to sell your house fast
Styl Properties, Inc. is here to help homeowners out of any distressed situation.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577.
Photo by Théo Dorp on Unsplash
