Beyond repairs and improvements, there are other costs to putting your home in the market – these home selling tips will help you anticipate these costs and make the necessary preparations.
Fees and commissions
The majority of transaction costs and commissions during closing will be taken out of the proceeds of the sale. These include:
- Agent commissions (usually 5% to 6% commission to be paid to yours and the buyer’s agent)
- Closing costs (i.e. escrow company fees, home appraisal, etc.)
- Transfer tax
- Capital gains tax
- Property tax
- Home warranty (if applicable)
Although buyers customarily hire and pay for their own inspectors – many prefer to work with an inspector they can feel they can trust – there are times when you might need to have an inspection made before conducting open houses.
You may have to get an inspector to examine the property for pest or termite damage and structural issues before listing it. This gives you an opportunity to remedy problems before buyers discover them and use them as leverage in negotiations.
Depending on the size of the property, an inspection will typically cost $400 or more.
Professional home staging is a must for any home sale – according to the National Association of Realtors (NAR) 2019 Profile of Home Staging, one-quarter of buyer’s agents surveyed said that staging can increase the dollar value of a home’s offers from 1% to 5% compared to similar properties that haven’t been staged.
Moreover, 83% of buyers’ representatives stated that staging made it easier for their clients to view a home as their own.
The cost? The report found that the median amount paid for home staging was $400.
To make sure that the home is in pristine condition, you might have to invest in professional cleaning services before listing the property. You might also need to hire a professional to power wash the walls, clean the roof, and clear the gutters.
Garbage disposal can pose another challenge – although Houston residents are allowed to leave as much trash out on the curbs, provided that their neatly bundled in trash bags, other North Texas cities may impose a limit on how much you garbage you can leave out.
This limit is often determined by the amount of trash you can fit into the bin that has been provided for your address. If you exceed the limit, you’ll have to rent an additional dumpster.
Open houses allow many different kinds of people into your home, so security can be an issue. Some guests might accidentally break or damage items inside the house as well. So if you own valuable items like fine artwork, antiques, heirloom furniture, musical instruments, and the like, it’s worth putting them in a rented storage facility for safekeeping while you wait for the house to sell.
Taking out these items also makes it easier for the home staging company to bring in their own décor and furniture.
You might have to continue to pay for water, electricity, and air conditioning while the house sits empty. Keeping the utilities on will help potential buyers make sure that the electric wiring, light switch, toilets, pipes, and faucets are in working order. It also makes the home appear more inviting during open houses.
Switching the utilities off can make the property seem inhabitable. Or worse, buyers might think that you’re trying to conceal issues with the pipes and wiring.
The costs will depend on how long your property stays in the market, and of course, the utility rates in your area. Just make sure that the water and electricity are kept off when there are no home viewings.
No matter how beautiful the home or desirable the neighborhood, sometime the property will sell for less than you’d hoped. You may get lower offers despite your best efforts, which is why Realtors typically advise sellers to manage their expectations.
They may also advise you to make allowances – for instance, if the floor needs to be refinished or several cracked tiles need to be replaced, and you don’t have time to get them done, you can simply offer the buyer an allowance to make basic repairs and cosmetic enhancements themselves.
This practice works for sellers who are pressed for time and would like to list the property quick.
Once the property has been sold, you’ll have to move house – and depending on where you move and the number of belongings, the costs of relocation can easily go up to the thousands. These costs include the moving truck and insurance. If you’re driving, get ready to spend on gas, especially if you’re moving out of state.
Other relocation costs include permits, vehicle registration in your new state, garbage pick-up, and the fees for arranging electricity and water service in your new home.
Let me, Michael Thue, help you sell your home. Get in touch with me at 562.299.3583, or send an email at Michael(at)SoCalTopHomes(dotted)com. You can also send me a message here.