A seller’s market? Be prepared to spend to sell.
It is commonly discussed that it can be expensive to buy a home however no one thinks about the cost of selling. Right now it is a sellers market so surely it can’t be that expensive to sell, right? Not always.
Is your house really ready?
Today’s homebuyer wants to be educated on the property they are purchasing. This includes your necessary home inspection and can involve other inspections as well. Radon, mold, wood destroying insects, septic, lead based paint etc. are all optional inspections that must pass before a lender will approve someone purchasing your home. While the buyer pays for these inspections, if the inspectors find anything it will cost you money, time and potentially the loss of a buyer to fix any issues.
Be ready to give your home a mini facelift before showing it to potential buyers, they can’t see everything the inspector will so they want to see a move in ready property. We all spill something on our flooring from time to time; have kids or animals that track in extra dirt from outside. Be prepared to shampoo carpet or replace it if it is bad or have hardwood floors cleaned and waxed. Usually $1000 is a solid baseline to prepare yourself for as long as you know that amount will fluctuate depending on your situation.
It costs you to move
If you are selling your home, you have to leave before the new owners can move in! Whether you are downsizing, relocating or moving somewhere larger you still have to package and move everything you own. Boxes, plastic totes, tape, bubble wrap and other miscellaneous things to make sure your belongings stay safe in transport all add up quickly. Then you have to decide how everything will get from your sold home to your new one. Moving companies can do the work for you but it will be costly. Renting a U-Haul can also add up quickly if you are travelling a long distance or need it for multiple days. Make sure you weigh the pros and cons and find out all of the details before you choose one option over the other.
Lawyers and taxes cost you too
Lawyers or escrow companies arrange the paperwork to pay off your mortgage, send the payment and file the documents with the County Recorder’s Office. These costs can range from a few hundred dollars to over a thousand dollars. Taxes are something almost everyone dreads and it is no different when selling your home. Before you get to the closing table you will have to pay an excise tax which varies from state to state. This tax comes out of your profits so usually there is no need to pay out of pocket.
Paying the realtor and the closing costs
Your agent helped sell your home, your buyer’s agent helped sell your home; they both need to get paid and you may be responsible for both! Agent fees are typically three percent of the sales price so discuss with your agent if you will be paying for the buyer’s agent as well. If so, be prepared to lose six percent agent fee’s which will cut into any funds you expected to get from selling. Closing costs can often be expensive to the buyer and we already know buying a home is expensive. An educated buyer will ask you to pay for a portion or all of their closing costs so they are not giving over even more funds to buy the house. Paying closing costs can not be mandated but makes it more appealing to buyers; this can be a great time to use some negotiation skills to keep the buyer happy without giving up too much more of your profits.
Selling a home is not as easy as some people assume. Know the market you are in and educate yourself. Work with people who are willing to answer questions and help you along the way so you can profit as much as possible while selling a home that is appealing to a range of buyers. Get your home ready before hand and you wont be waiting long to move on to your next chapter in life.
Doctorloanprograms.com contributor