Mortgage rates are at a record low this year which is fueling buying power within the housing market. So, now is a good time to sell. Still, it’s not just a question of finding a buyer but also about getting the offer you want.
In a tough financial climate, you could be facing an offer that’s left you trying to do the math so that you can work out whether you should take it or not. Before you decide the viability of an offer you should know how much does it cost to sell your home. Even though the buyer is spending the money, you will have your share of costs.
in this article, we’re going to help you consider 6 factors that will influence the cost of selling your home. Read this article so that you’re not blindsided by unexpected costs that put you on your back foot financially.
1. Commission Where It Is Due
The commercial machinery of buying and selling homes is driven by the commission due to the real estate agent. This is around 5 percent. That means if you sell your house for $200,000 you can expect to pay at least $10,000.
That’s not small change, so it’s good to be prepared for this. There are ways of reducing the commission. You could consider negotiating this with your agent from the start.
An alternative strategy is to sell the house yourself. This will bring its own stresses so you should be prepared for that. Whatever you decide, you will also need to hire a legal expert to draw up the contract of sale.
2. Death and Taxes
It’s a famous adage that we all accept. Selling your house is no exception. You need to be prepared to pay the taxes due on your property.
For example, you need to keep in mind the capital gains tax. This will affect you if your property value has massively increased when compared to the purchase price. Profit or no profit, you will still need to remember the property tax which is normally prorated.
3. Privilege of Closing Quickly
There will be fees associated with closing the sale of your house. They may include the title insurance, a brokerage fee as well as a courier fee. These costs are thought to be about 2 to 4 percent of the property value.
Traditionally, these costs are met by the buyer. However, in a buyer’s market or under circumstances in which you want to close the deal quickly, it may serve your purpose to fork out these fees yourself. In which case, it is as well to be aware of what they are and roughly how much they’ll cost.
4. Hidden Mortgage Costs
You may think everyone is happy to see you pay off your mortgage; however, the bank has forecast a certain level of financial return on the loan based on a set duration of the loan.
If you opt to pay early, then you’re potentially reducing the return that your lender will receive. As such, don’t be surprised if there are early payment fees that you didn’t count on. You can request in advance what these fees are should you wish to pay put your mortgage early.
5. Ongoing Utilities
Depending on the circumstances of your move, you may need to vacate the premises and leave them in the hands of your real estate agent. If that’s the case, you will need to continue to heat or air the property while it’s being sold.
The energy bill will soon mount up. Even if you’re still in your property you will need to pay your final utility bill when you finally hand the property over to the new owners.
6. Property Readiness Costs
There are several costs associated with preparing your property so it’s optimally placed for sale. Some of these costs include the following.
Enter Stage Right
Staging your home for selling is a powerful marketing tool you shouldn’t. You may need to spend several hundred dollars so that your home has a neutral but appealing look. This may seem to be quite a large out of pocket expense but if it helps to sell your house for several hundred thousand, then it’s well worth the expense.
Repairs
Don’t hold back on the basic repairs that your home needs. If you’ve spotted what needs doing, then so will others. It would be a crying shame if some small repair that costs relatively little prevented someone from buying your home.
Inspection
Generally, this is a cost met by the buyer. However, you can opt to have your own inspection which will better prepare you for what really needs attention in your home before you sell. This kind of preparation will better place you to sell your home. All of this may seem like so much work and effort that you may want to consider fast cash home buyers instead.
How Much Does it Cost to Sell Your Home — Check
In this article, we have helped you understand 6 factors that will help you understand how much does it cost to sell your home. Overall, these costs are unavoidable so you’re wise to estimate them before you sell so that you know what your limits are in any negotiation scenario.
While there are some opportunities to make some savings on the costs, this will definitely elevate your stress levels. Check out our other latest articles that will keep you motivated in home improvement and creativity around the house.
