As we all know, it takes money to make money. Accordingly, there are costs involved in selling your house. But first-time sellers may not be aware of the extent of these costs. If, however, you can bring down the inevitable selling costs, you can make more money on the sale. And the first step is becoming aware of and understanding such costs. So let’s see what you can do to avoid the costs of selling your house.
What Are the Costs of Selling Your House?
The biggest and most common costs of selling your house are:
- Agent commission – Often the largest fee for sellers, the typical agent commission is around 5% to 6% of the sale price.
- Home repairs – These are absolutely necessary before listing, and unless you have the needed DIY skills and the time, they can be pretty expensive if you have any major problems.
- Pre-sale inspection – While not required, a pre-sale inspection is definitely a good idea so that you can be aware of problems (and remedy them) before the buyer’s inspection.
- Staging – Staged houses sell faster and for more than unstaged ones, so you can’t skip this.
- Utilities – If you move out before the sale, you’ll still have to keep the utilities on, especially in severe weather.
- Mortgage payoff – Not all the home sale proceeds can go into your pocket. Typically, a large portion goes to pay off the mortgage, as well as the associated fees.
- Closing costs and fees – Although closing costs are typically the buyer’s responsibility, you may have to pay a portion to sweeten the deal in order to make a sale. And there are other costs and fees such as for property taxes and title search.
- Capital gains tax – If you do make a profit on the sale, you will have to contend with capital gains tax.
Obviously, then, the costs of selling your house are nothing to sneeze at, and you would be well advised to reduce or avoid those costs.
Costs of Selling That Can Be Avoided/Reduced
Some of the costs of selling your house are inevitable and pretty intractable. There are a few, however, that you can lower or avoid altogether, such as:
If your roof is in terrible shape, you’ll just have to open your wallet and get a new roof. While cosmetic preparation is optional, it can, in fact, garner you a better sale price. And unlike with the roof where you just have to fork over what the roofing contractor puts on the bill, the costs can be controlled.
First, set a budget and stick to it. Just do all you can to make your house looks better while staying within that budget. Your agent can help determine which project will yield a better return on the investment. (Call 866-593-7012 to discover more about this.)
Contrary to popular opinion, you don’t have to spend a bundle on major bathroom renovations, the real estate pros say. “Most buyers poke their heads in and don’t spend time in the bathroom, so don’t invest too much on yours unless there are major issues. Keep the room extremely clean [and] buy new towels. . . . If the room is a dark color paint it white.
The final aspect of preparation that can’t be neglected is staging. Professional stagers can be pricey, but you don’t have to use them. Using ruthless decluttering, a little common sense, and a reading of staging principles, you can do it yourself.
VARIOUS SELLER FEES
Go over your paperwork with a fine-toothed comb, and don’t hesitate to consult your agent if you need to. “Buried in the paperwork of your 10- to 20-page offer will be a list of fees the buyer and seller will pay. In addition, a buyer might ask for additional inspection reports or even a seller concession on closing costs.” The thing to keep firmly in mind, though, is that all these costs are negotiable. Here’s what you can do:
- When you make a counteroffer, ask the buyer to pay some of the seller’s fees.
- Don’t automatically agree to pay for a buyer’s home warranty.
- Put a cap on how much you will pay (or knock off the price) for repairs.
- Close very early in the month to avoid some interest charges.
Hire an Experienced Local Agent
Although you will have to pay your agent her commission, a good agent can help you avoid many of the costs of selling your house (not to mention negotiating a better sale price). According to industry experts, it’s “important to hire a listing agent to help you squeeze every dime possible out of selling your home. Sellers sometimes want to hire agents who charge lower commissions to save money, but that’s the wrong approach. If an experienced agent who offers you more marketing and better service charges 1% more than a competitor but brings you 10 percent more in profit, you’re further ahead.”
Do you truly want to sell for more and avoid the costs of selling your house? Find out how our experienced agents can help you do just that.