Seeing homes in your neighborhood sell a few thousand dollars over the original asking price may entice you to sell your first home as well and move on to your next one, especially if you’ve been contemplating on upgrading for a while now.
What many first-time home sellers don’t take into account when selling their home and deciding on a price, though, is that there are plenty of things (expenses in particular) that can eat up a good chunk of the profit they’re hoping to make.
Wondering just how much it’ll cost you to get your house on the market and sell it? Here are a few things that’ll give you an idea.
#1 Real estate commissions
This is one of the biggest expenses you can expect to be taken out of the amount from the sale of your home. On average, real estate commissions range anywhere from 5% to 6% of the total sale price. This is usually split between the buyer’s agent and the seller’s agent and shouldered by the home seller. When the market is hot and your home is expected to sell quickly and/or over the asking price, you might be able to negotiate for a lower commission rate. Now, you might be thinking, “Well, can’t I just sell my house on my own and skip hiring a real estate agent so I don’t have to pay commission?” Well, you could but it can make the whole process long and tedious. Here’s why you’re better off hiring a real estate agent.
#2 Home Repairs
Your home value decreases with every damage and every issue that the home inspector will come across. If you want to sell your home at a fair price (to you) or even above asking, you’re going to have to make sure it’s in great condition before your agent starts showing it to potential buyers. This means you’ll have to do all the necessary repairs needed to bring its value up and the cost of these repairs are going to have to come straight out of your pocket.
#3 Utilities
So you’re moving to your new home while waiting for the old one to sell; that doesn’t get you out of the responsibility of paying the utilities for your old house until it sells. You want your potential buyers to be able to see your home in “working condition” aka how it would look and feel on an everyday basis. It’ll be pretty hard for them to imagine living in your home without the lights and AC working, now, wouldn’t it?
#4 Taxes
Another huge expense that you can look forward to paying when selling your home is tax. There are different types of taxes that you’ll need to pay to legalize and finalize the sale of your home. These include capital gains taxes, property taxes, and real estate transfer taxes. Most of these, if not all, are shouldered by the seller so expect a huge chunk of your earnings to go here.
# 5 Moving costs
Lastly, you’ll have to pay out-of-pocket for moving costs. Moving services can be quite costly so if you’re moving somewhere near, you might want to do it slowly, taking several trips to and from your old house to the new one. If you’re moving somewhere far, though, you might have no choice but to hire movers. And, if you don’t have your new home sorted out yet and you’re already in the showing stage for your current house, you’re going to have to shell out on accommodation as well.
Keep these expenses in mind when selling your house. Some people make the mistake of pricing their home too low just to sell it quickly, only to be left with less than what they expected to make off of the sale. To help you figure out how much your home could sell for, get in touch with your trusted real estate agent.