What Does it Cost to Sell a Home
Many consumers are amazed to find out how much it really costs to sell a home. They receive a HUD-1 before closing from the title company expecting a specific amount of money only to find out that it is several thousand or more less than the number they thought they would receive. Most focus on the real estate commission which admittedly is usually the largest number. Typically, it is 6% of the selling price which can be $30,000 on a home that sells for $500,000. There are other fees as well which need to be considered.
Cleaning, yard work, staging, storage, moving, listing fees, agent fees, admin fees, notary or legal fees, and don’t forget minor renovations to help your home sell more quickly. The amount of work as well as cost can be daunting for many people. Before you decide to sell your home, evaluate all of these costs and wok activities to help you chose the best approach. You can sell as is, sell to an investor, rent out your home or stay in place. Let’s look at some of these costs in more detail.
Cleaning, Yard Work and Staging
This step is aimed at getting your home ready to sell and making it look as good as it can be without doing any major repair or renovation work. Ensuring that everything is clean, clutter is removed and staging with furniture and accessories that appeal to buyers is important. Landscaping should be well maintained, lawns cut, shrubs trimmed, flowers planted etc. to make your home is attractive from the outside. Pay attention to curb appeal. This is the first impression that many people have of your home. You want it to be a positive one.
Major renovations for the purposes of selling a home usually do not pay for themselves. Minor renovations and repairs can often help your home sell faster and for a higher price. Planting a few shrubs, adding mulch etc. will enhance your home and is often the first impression buyers have of your home. Clean carpets, freshly painted walls, locks that work on doors, repair of cracked tiles are just a few examples of minor renovations that can enhance a home to make it more interesting to buyers.
Moving and Storage Costs
One of the recommendations is to remove clutter from your home. If you intend to take these items with you to the next home, your going to need somewhere to store them until you move. There will be packing and moving costs along with storage costs to consider.
Of course when it comes time to move into your new home, don’t forget the packing and moving costs associated with moving items from your old location and the storage facility to your new home. Many consumers will move themselves, however there are still packing materials that need to be purchased and rental of a truck to move your things. Don't forget the pizza and beer for your friends that help you move.
Listing Fees, Admin Fees and Legal Charges
We already mentioned the listing fee. Sometimes these fees can be negotiated however it still will be a large number that must be accounted for. Your agent may also pass along fees for marketing your home, clerical work for listing your home on social media, printing brochures for open houses etc. The deal must be closed and the notary will ensure that all legal processes are followed including release of your current mortgage. Depending on the requirements and type of sale, there will be various fees associated with the notary activity. Take the time to understand before hand how all of these charges are calculated and which ones will apply to your transaction. Some will be flat rate while others will be based on the selling price. Most notable of these of course is the real estate commission. This is a large number and one that consumers should pay attention to.
If all of this work and expense is too much for you, there are other options. One option is to sell to an investor and avoid much of the cost we have just discussed. Notary fees will still be required, however listing fees, real estate fees etc. can be eliminated. In addition, the home sale closes much more quickly and you have your cash in hand within a relatively short period compared to several months for a traditional home sale.