How Much Does it Cost to Sell a House?
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The traditional method of selling a house involves several steps, and some of these steps involve fees. What are these fees for? And how much are they? Here is an overview of how much it usually costs to sell your house.
- Home Preparation and Repairs
- How much does it cost? Each house is different, so this depends on the condition of your property. If your house only needs minor work, then this amount may be manageable. However, if your house needs major work to increase its value, be financially prepared to undertake this project. This usually includes several home maintenance or home improvement projects, such as professional cleaning, landscaping, upgrades, replacements, remodeling, and more.
- Who shoulders this cost? Basic house repairs should ideally be done before putting your house on the market, so it is your (the seller’s) responsibility to shell out for this project.
- Can you avoid this cost? If you plan to sell your property in a couple of years, be a good homeowner. Maintain your property and do the necessary repairs before they become even more complex and expensive. Remember that if there are any problems that are only revealed after the buyer’s home inspector conducts a property inspection, you might still have to pay to fix those issues to close the deal.
- Home Inspections (pre-sale)
- How much does it cost? It could cost around $500 or even more.
- Who shoulders this cost? This is a pre-sale step, so it’s the seller’s responsibility to hire a home inspector and pay for the fees.
- Can you avoid this cost? In a way, yes, because this step is optional. However, a professional inspection is highly recommended because it helps you to find out what defects need to be repaired, and you can do the repairs ahead of time for a hassle-free sale. Remember that if the inspection does reveal problems with the house, you need to inform the buyer, depending on your state’s laws.
- Home Staging and Professional Marketing Photos
- How much does it cost? This could cost you up to thousands, especially if you plan to hire a professional stager and photographer.
- What is it and why do I need it? The purpose of staging is to add elements to the property strategically to make it easy for prospective buyers to see themselves living in it. This typically involves cosmetic repairs, a new coat of paint, adding fresh flowers or live plants, adding accessories, or even adding and arranging furniture. Additionally, clear and high-quality photographs of your home are necessary if you want your listing to stand out from the rest. Home staging and good photographs of the property are essential if you want to market your house
- Can I avoid this cost? Yes, as you have the option to stage your home and take photos of your home yourself.
- Utility Bills
- How much does it cost? This can be determined by checking your current bills. Your present utility bills will give you an idea of how much it will cost each month to leave the utilities on until the new owner moves in.
- Can you avoid this cost? It is recommended that you leave the water and electricity available if you plan to move out before selling your property. When showing your home, you will need water, air conditioning or heating, lighting, etc.
- Realtor’s Commission Fees
- How much does it cost? This is usually the biggest fee the seller has to pay. The real estate commission is approximately 5% to 6% of the total sale price. If you sell your house for $1,000,000, then the commissions could be as high as $60,000.
- Who gets the commission? This fee is split between your (seller) real estate agent and the agent of the other party (buyer).
- Who shoulders this cost? It is usually the seller who bears this cost.
- Can you avoid this cost? Now there are ways to avoid these fees. First, you may try to negotiate a lower commission. However, this is not guaranteed and does not happen all the time. Second, you may list your home as a for-sale-by-owner (FSBO). If you choose to go this route, however, you have to assume the responsibilities of a real estate agent. That means doing the basic duties of an agent, including showing, negotiating, hiring a lawyer for the contract, and handling the transfer of title, yourself.
- Outstanding Mortgage Balance
- How much does it cost? Refer to your loan documents or talk to your current lender to determine the amount and to know if there is a prepayment penalty.
- Who shoulders this cost? The seller will shoulder this cost. Usually, the proceeds of the sale will be used to cover your mortgage.
- Closing costs and other fees
- How much does it cost? Closing costs are an assortment of fees and can range from 2% to 4% of the property’s sale price. These costs may include other fees such as attorney fees, escrow fee, brokerage fee, courier fee, transfer and property taxes, title insurance, and homeowner association fees.
- Who shoulders this cost? The closing costs are usually the buyer’s responsibilities, however, there are some cases when you (the seller) may be asked to share the expenses. When this happens, your fees will be much lower than the buyer’s.
- Can you avoid these costs? Some of these fees are negotiable, however, it is recommended that you prepare for these fees nonetheless when planning to sell your home.
- Capital Gains Tax
- How much does it cost? This depends on the sale price. When your home is sold for more than you originally bought it, that is considered a capital gain and may need to be filed on your federal tax return.
- Who shoulders this cost? You (the seller) will shoulder this cost.
- Can you avoid this cost? If you have lived in the property for at least two of the last five years, you’ll get a tax break on the profit. Many homeowners are eligible to exclude up to $250,000 of profit from their main home from this tax. For married people filing jointly, the amount can go up to $500,000. However, it is important to note that this is only valid if they have not used the tax break on another home sale within the past two years.
- Property Tax
- How much does it cost? The amount varies widely by location.
- Who shoulders this cost? The seller should pay a prorated amount of the property tax until the closing date. However, if you have already paid taxes for the year, you may be able to get a rebate upon closing. The buyer will need to reimburse you for the amount you have paid.
- Can you avoid this cost? You may verify with tax agencies in your local area if tax relief is available.
Whew! Who knew selling your home could be so expensive? From repairing your house to make it sellable to closing the deal, selling a house the traditional way involves several fees.
The good news is that you can skip many of these steps when you opt to sell your home for cash. When you sell your house for cash, the process is not only quick, you will also get all the proceeds of the sale as there is no commission to pay! Plus, you don’t even have to worry about the repairs and staging! Are you ready to sell your house for cash fast? Talk to one of our representatives at WeBuyAnyHouseFast.com at 800-976-SOLD!
Photo Credits Laurie Shaw and Nattanan23 via Pexels