Finding the answer to how much does it cost to sell a home and figuring out who pays a closing can be tricky. We help break down some of the costs of selling a home below.
Costs Involved in Selling Your Home
Real Estate Agent Commissions
A real estate agent’s commission is usually the biggest cost involved in selling your home. Their commission varies, but it’s usually 5-6% of the sale price of your home. For example, if your home sells for $350,000, their commission would be around $17,500. This commission is split between the buyer and seller agents. The cost may seem high, but a lot of work goes into selling your home between showing the property and ironing out the legal paperwork. Some agents will negotiate rates if your home is priced high and expected to sell quickly. It’s always worth discussing!
A home inspection costs about $400 and it notifies you of major repairs before the buyer comes in with their own home inspector. Home inspections are optional, but they do allow the opportunity to get ahead of the buyer and recognize any major faults before they request you to lower the price due to an issue with the property.
Home repairs can add to the value of your home, but they also add up. Repairs can give you the chance to address any issues that came up during the inspection, or they could simply raise the value of your home with a bathroom or kitchen remodel. Be careful and consult with a real estate professional before making any major repairs to raise the value of your home because it’s possible you won’t make your money back in the sale. Major repairs can range from $4000-18,000, so do some market research before diving in.
Staging your home transforms it into a space that buyers could imagine themselves living in. Depending on what lengths you go to make your home cozy and welcoming, the costs can add up. Expect to spend anywhere from $500-2000 to hire a staging company, install bright lighting, updated cabinets, and apply a fresh coat of paint. Lighting a candle and planting fresh flowers are some easy and inexpensive ways to increase the appeal of your home without too much work.
Depending on your situation, moving can be expensive, unless you own a truck or have a friend that does! Moving costs like movers and trucks can range anywhere from $600-1500, so remember to budget for transporting your belongings out of the house.
Paying Off Your Remaining Mortgage
Once you sell your home, you will likely use a fair portion of the proceeds to pay off the remaining balance of your mortgage. You should have enough money from the sale to cover the remaining cost, and if you don’t, consider selling your home in a market that will allow you to pay off the remaining mortgage and have money left over. Until then, keep paying that mortgage down!
Who pays for a closing can be unclear. Closing costs cover but aren’t limited to homeowners association fees, property taxes, attorney fees, transfer taxes, title insurance, an escrow fee, a brokerage fee, and a courier fee. These costs usually total 1-3% of the home sale price. Buyers and sellers usually negotiate on closing costs, so it is unlikely that sellers will have to pay all of the fees.
How to Reduce Costs
If these costs seem steep, that’s ok. There are ways to reduce the cost of selling your home, especially on the repairs front. Remember to carefully consider costs when making repairs and not to over-improve. It can be difficult to make that money back in the sale of your home. Additionally, do it yourself when you can. Small repairs like repainting a room or doing some landscaping can be done in an afternoon and are not worth paying a professional to do.
Ready to Sell?
No longer wondering how much does it cost to sell a home? Feeling ready to sell your home? We’re here to help answer questions you have about the selling process. Contact Josiah Allen Real Estate today to sell your home. We can’t wait to hear from you!