How Much Does It Cost to Sell a House in My State?
Selling a home can be a tough task if you bought it at a time when the market has changed to include more expensive homes, or it is a home in an area where there are many other similar properties for sale.
Most people do not know how much it really costs to sell a home and all the procedures and expenses that this entails. While you can use house selling websites to sell your home, you have other options as well, which we will discuss below.
What Is the Value of Your Home?
How much does it cost to sell a house and what is the value of the property? These are the million-dollar questions and even if you call an appraiser, the price of each home cannot be known exactly.
If you were to check the prices of homes on sale in any of the well-known portals of the country, you will see prices per square meter of all kinds.
It is of the opinion that each home has its virtues and its defects and although you can estimate an approximate price when putting it up for sale, everything will depend on how fast you want to make the sale and what the potential buyer is willing to offer you for it.
Logically, when you put your property up for sale, the intention is to sell it for as much money as possible, but the problem is that most of the time, you may end up inflating the real value of it for various reasons. In the end, everything is about negotiation, but there are several free tools on the Internet that can guide you on the approximate market value of a particular home.
You should analyze the market well before putting your property up for sale to try to adjust the price as close as possible to reality so that you have the possibility of selling it.
How much does it cost to sell a house? Once you are clear about the sale price, you have to get several documents in order before completing the sale and giving the keys to the new owner.
The Appraisal
The first thing is getting a home appraisal, which is mandatory when selling a home. Usually, as the seller, you have to assume this cost on your own. There are official and approved appraisal companies that will be able to carry out the home appraisal to give you a definitive price of the value that your property may have in the market. To appraise a home, they use several scales: neighborhood, street, building, state of the building, square footage of the home, if the home has been renovated and when, and any additional renovations; among other things.
Normally, if you are going to buy a home through a mortgage, the bank will value it, and based on the result, it will be able to loan you a certain amount of money. In that case, the cost of the appraisal is usually borne by the buyer.
Real Estate Cost
To avoid a significant cost, the ideal would be not to have an intermediary real estate agency. Although, it is also true that it filters a lot of potential clients. In addition, from the beginning the realtor or agency can take care of everything including the photos of the house, advertising the sale of the home, showing the house to the interested parties, drafting the deposit contract, gathering information for the formalization of the sale. Those costs can work out to be excessive since we are normally talking about a 3% commission on the sale price.
However, you would be working with an expert, and selling a home is no joke. Knowing what to do and when to do it will only get the house sold in a faster period of time and for the most money. Most real estate commissions are between 3 percent and 6 percent. Therefore, if your home is worth $200,000, then the commission you would have to pay the realtor is between $$6,000 and $12,000. You can negotiate this fee with the realtor.
The Home Staging Process
If you decide to try to sell your home without the help of a real estate agency, you should bear in mind that you will have to follow some specific steps. This is especially true if you want to be successful in taking some good photos, advertising the home on the maximum number of real estate portals, and even hire someone for the home staging aspect of it. A professional home stager could charge you as much as 1 percent up to 10 percent of the value of the home. However, the average cost is usually a little more than $1,000.
The home staging, sale or exhibition, is important in selling the home faster. You could prepare it yourself, but it would be best to use a professional home stager.
The term home staging refers to a set of techniques used by professionals in the real estate sector, the objective of which is to enhance the positive aspects of your home and improve the perception of potential buyers regarding it.
These techniques, until some time ago, were exclusive to luxury properties and large real estate developments. Today, some of the best real estate companies in the sector offer this service to their clients, reducing sales time and increasing the market value of all types of homes. If you sell your apartment, condo, or home as a private individual, you can directly request the services of a home stager. Prices will vary depending on the professional and the home, but the result will be worth it.
Publishing an Ad
You can publish your ad for free online or offline, but if you want to give it visibility and relevance above other homes similar to yours, you will have to pay the premium fees offered by these portals. When you place a paid advertisement to sell your home, you are going to be competing with other homeowners who are trying to sell their homes as well.
That is why it would be easier to use the services of a realtor or agency to do the advertising for you.
This advertising cost would be wrapped up in the commissions that you have to pay when the sale has been completed. Therefore, this would be an extra cost.
Home Appraisal
It is clear that we all want to know how much we can get for our property. The best time to find out is before you start advertising the home for sale. Some owners decide to request the valuation of their property from an official appraisal company. The problem is that these types of appraisals do not make business sense.
Official appraisals are very useful when it comes to legal proceedings, such as divorces or inheritances. However, they are not the best option when it comes to setting a market price that buyers are willing to pay.
A real estate professional and an official appraiser take into account certain aspects such as the location and state of conservation of the property, the square footage of the property, the public schools as well as the religious and retail establishments in the surrounding area.
However, only a real estate agent knows first-hand the prices at which the homes are actually selling in a certain area and why that is the case.
Taking Photographs
The photographs you use to advertise your home on the internet can make the difference between receiving calls from potential buyers every day, and not receiving any. If you decide to sell your house with the help of a real estate agency, you should demand that they use professional photographs in their advertising, which is often the case anyway.
On the contrary, if you decide to sell your home as a private individual, it is recommended that you hire the services of a photographer who specializes in real estate photography. The cost of a photographic report is affordable, although if you search a bit online, you may find the right prices.
Earnest Money Contract
A deposit contract is one that is signed between the seller and the buyer whereby the buyer puts a certain amount as down payment, normally 10% of the value of the home, for the purchase of the same and where a deadline is usually indicated for formalizing the sale.
It is a good-faith effort and a way of ensuring both parties that the transaction will be carried out.
Preparing the Property
It is important to prepare the property for sale. One way, as discussed above, is home staging, but there are other things that you need to do to make sure that the property is in good condition for potential buyers to be able to view it.
The first thing to do is to clean the house; from top to bottom. This will require extensive cleaning by a professional cleaner. This cost could be between $250 and $400. Of course, you can do this yourself, but it could take a lot of time and effort.
Next, you should repair anything you see wrong around the home such as broken doors, holes in your walls, chipped paint, put in new flooring, install new carpeting, roof repair, change faucets, and so on. You could end up spending $1,500 for minor repairs and more for major repairs. You should factor these costs into the selling price of the home.
You also need to make sure the house has good curb appeal. For that reason, you should consider hiring a landscape and design company to do the updates including power washing the driveway and cutting the grass. You should also hire a painter to paint the exterior if this is necessary. You should expect to spend about $2,500 for both of these.
To reduce this cost, you could ask family members to chip in, especially those with specific skillsets. If you decide to hire a local professional, it is best to get quotes from various companies before making a decision.
The goal is to have the home in excellent condition before the sale.
Home Inspection
Many mortgage companies require a home inspection before approving the loan for the purchase of a home. The buyer is usually responsible for this cost. Home inspection includes the roof and the structure of the home. The lender wants to make sure that there are no structural failures or major roof repairs. Some local municipalities could require the homeowner to have an energy audit done prior to the sale of the home. This cost could run as much as $300 or less, depending on the city and state.
If you want to ensure that the home is in the best condition for a successful sale, you should have your own home inspection specialist do a walkthrough for you. If any defects are found the home inspector will let you know and that is when you would hire professionals to do the repairs. A home inspection specialist could charge as much as $400 for the service.
The Closing Cost
How much does it cost to sell a house? The buyer is the one who pays most of the closing costs, even though the seller might have to pay some.
The closing cost amount will depend on where the home is located; city and state. The closing cost includes property taxes, transfer taxes, escrow amount, title insurance, and attorney fees.
Potential Additional Expenses
If you have any prepayment penalties on the mortgage for paying it off too early, you should expect an additional cost, which will be withdrawn from the sale amount.
If you owe any capital gain taxes on the profits made from the sale, this would be also added as an extra expense.
The Taxes
If you have decided to put your house up for sale, you can contact a real estate agency to find out how much money you can sell it for. With the money you will get from the sale, you can buy the house of your dreams on the outskirts, and you could still have money left over. A few months later, you receive a good offer for your current house and decide to accept it. Have you considered the taxes you may have to pay on the sale of your home? No one had told you anything about taxes. You start to add up the numbers and, adding taxes, mortgage cancellation costs, and the real estate commission, the numbers do not seem sufficient to purchase a new home. If you had known from the beginning all the expenses that the sale of a home entails for the seller, you would have saved yourself the scare.
In most cases, if you reinvest the total amount obtained from the sale of your existing home to purchase or renovate a new home, you are exempt from being taxed on the sale amount. If you reinvest only part of the amount obtained from the sale of the home, only that part will be exempt. To get this exemption, it is necessary that you carry out the reinvestment in a period that does not exceed two years from when you sold the home.
Both selling and buying a home entails expenses. Buyers know it well. Most of the expenses generated in the sale are paid by the buyer. At the end of the day, it is the buyer who pays the documented legal acts (if applicable) and the notary signing fees. However, what about the selling part?
In most cases, some homeowners are not aware of all the taxes and expenses they will have to face, during and after the sale of their property. Some of these expenses are small and insignificant, but necessary.
Cancellation of Mortgage
If you bought your house with financing, you may still be paying the mortgage when you sell it, and, therefore, you have to pay off the mortgage. This is another of the home sales expenses that you have to take into account since you will have to compensate your bank for the loan. This amount will usually come out of the amount you received from the sale of the house.
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Conclusion
The expenses when selling as a private individual are different from the expenses generated if you sell with a real estate agency. Although, in most cases, you have a better chance of obtaining better results with the sale of your property with help than without it. Choose the formula that works best for you, without forgetting that the sale of a property is one of the most important transactions that you will face throughout your life.
If you want to learn more about the process of selling a home, check out the Goalry platform online and the Loanry store on the platform. You will gather even more information on the subject.