How Much does Selling a House Really Cost?
Posted: August 20, 2018 by Alan Tucker
When you’re selling your home you can expect to make a certain amount of money when the sale is complete, but have you considered how much money goes into selling a home? Many people forget to consider things such as realtor commission fees, home repairs, paying off your mortgage, and closing costs—all of which can really begin to add up. That said, understanding and preparing for the expenditures that come will selling your home is the best way to avoid spending on unexpected surprises.
Know you Realtor Commission Fees
Those working to help you sell your home work very hard to make sure that your home sells and for a price that suits you; as such, they’re due a commission fee for their time, and this fee is usually between five and six percent. While this may seem like a small amount at first, a realtor fee of five percent on a home that sells for $300,000 is $15,000. As such, you should be prepared to set aside a portion of the sale to pay the commission fee.
You may think your home is in peak condition when you list it on the market, but you’ll probably find that there are some blemishes that you’ve simply become accustomed to. Is your driveway cracked? Do you have a hole in a wall from a pesky doorknob? Is there a light switch that sticks? There are sure to be plenty of things in your home that you’ve overlooked. As a result, you can end up spending a decent amount of money on small repairs that, when added together, can end up being a sizeable bill.
The best way to prepare for spending on home repairs is to simply take stock of what needs to be done around the house and getting ahead of the curve by starting on the repairs prior to listing your home.
This is also not to mention that you may end up spending money staging your home—after all, you may like the unique color of your living room walls or the wallpaper in your bathroom, but changing these things to be more neutral will make your home more buyer-friendly.
Paying off your Mortgage
After the sale of your home, you will have to pay off your mortgage, and the amount you pay will obviously depend on a number of things, including the size of your down payment, the life of the loan, etcetera. That said, understanding your mortgage is obviously vital in paying it off. That said, taking account of how much you paid on your down payment and how paying off your current mortgage will impact your payment of your next mortgage is vital in the sale of any home.
Typically closing costs are the responsibility of the buyer, but if you’re selling in a buyer’s market then you could be asked to pay a portion of the costs. Whether you’re paying transfer taxes, property taxes, attorney fees, a courier fee, or one of the many more possible fees, the overall closing costs can add up to as much as four percent of the overall sale price.
In all, it’s important to note all of the fees and expenses the come with selling a home. There is certainly money to be made to selling your home—it’ll probably be the biggest financial transaction of your life—but there is a certain amount of money that must be spent to ensure that your home sells. Be prepared to spend before you take in money from the sale of your home.