Selling a home in a metropolitan area can cost more than you expect. Of course you plan for the sales commissions and closing costs, but that could be just the beginning. Unexpected costs can happen at all stages of the process and planning for these unforeseen outlays can help you mitigate the effect they have on your profits. You might even be able to avoid some of the costs of selling your house fast by preparing in advance.
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Listing Expenses To Sell House Fast
Before placing your home on the market, you will need to prepare for the sale. A little time and investment in the beginning can save you thousands of dollars later. A properly staged home which shows well will claim not only a higher sales price but also reduce requests for repairs from the home buyers.
A fresh coat of paint inside and/or out is an inexpensive way to create curb appeal. Clean walls and designer colors show well in person and in photographs. A neutral palate offers buyers a nice backdrop for their own furnishings and gives a modern, new appearance.
It’s time for a deep cleaning inside and out. Eliminate household and pet odors in carpets and fabric. Hire a carpet and upholstery cleaning company to make everything fresh. Wash windows, clean appliances, scrub bathrooms. A sparkling fresh clean home is a showing must.
Review your home with a critical eye. Make any repairs you notice in advance. Fix loose cabinets, leaky faucets, cracked tiles or broken windows. Your home should look move-in ready, not like a fixer-upper. While both fixer homes and turn-key homes will sell, the difference in sales price can be thousands of dollars and the few hundred you spend on a handyman could make a huge difference.
In some communities and price ranges, staging is a must. Even if you are not in a market which demands professional staging you still need to make sure your home is in show-ready condition. You might need to put in new plants and perform other yard work. It could also involve removing some of your furniture and general clutter. If you don’t plan to donate this furniture, then you will incur storage fees while the home is listed.
As part of staging your home for sale, you might need to bring in decorative/lifestyle items. For instance if you have a nice front porch, you can highlight it with new outdoor furniture. Flowers, pillows, candles, doormat, bedding, and towels – all these items create a cohesive overall look for your home. Your home will look larger if rooms blend together for a nice flow. One of the easiest ways to achieve this flow is by using similar colors and décor throughout the home.
As mentioned above, curb appeal includes fresh flowers in the yard. But you might have a more extensive landscaping project to complete before listing your home for sale. If portions of your yard need major work, now is the time to get it done. Repair and replace missing fence or hardscape and make sure the yard is healthy and growing.
Pre-listing Inspections and Repairs
Most real estate agents now recommend that sellers arrange a pre-listing home inspection for repairs and termites. Knowing up front what problems might be present allows for positioning with buyers. Repairing termite damage and making other repairs allows you to truly sell the home “as-is.” While buyers will most likely still have their own inspections, you are able to offer the buyers the inspections and proof of repairs and assure them you have cared for the home.
Double Home Expense
If you plan to move before you sell your house, then you need to plan for several months, or more, of double household expenses. You will have double utilities, mortgage, insurance, taxes and HOA fees for as long as it takes to close. Once you find a buyer and enter the sales transaction process, you will still have fees to close. While these fees will come from the proceeds of your sale, you should be prepared for the costs so there are no surprises.
Real Estate Commissions
Real Estate Commissions are negotiable. The seller pays the entire sales commission and then seller’s agent offers a portion to the buyer’s agent. Commissions can be as high as 6% of the gross sale.
Closing Costs and Credits To Buyer
Again all these costs are negotiated at the time of the offer. Your agent can guide you as to what is customary in your market for the division of costs. It will include items like escrow, title insurance, title transfer fees, homeowner’s association documents and transfer fees, city and county transfer fees and more. You might have also negotiated a credit to the buyer to help with their closing costs and this must be taken off your bottom line as well.
It’s often customary for a seller to provide the buyer with a one year home warranty. Depending on coverage, this can cost up to $650 for coverage for the home, air conditioning and, if applicable, a pool or spa.
Capital Gains Tax
A home sales can trigger an income tax event. Check with your tax professional to determine if you will have any capital gains tax due upon the close.
You will be moving so there are moving costs. You might also have storage fees either for excess furniture during the sales process or while waiting for your new home. If you are planning to buy a home after you sell your current home, then you need to plan for temporary living expenses as well.
Replacement Home Purchase Costs
Once you close on your current home, you need to buy a replacement. Closing costs on the buyer’s side then come into play. You have the down payment for the new home, escrow and lender fees, appraisal and inspection fees, transfer fees and other negotiated costs.
Selling your home can be an expensive proposition. Often sellers think they can deduct the amount they owe on their mortgage from the expected sales price and that’s their profit. As you can see, this amount can be reduced by thousands of dollars in fees and costs. Planning for these expenses not only avoids the surprise, but can actually reduce or prevent the costs in the first place.