If you are thinking about selling your home you should understand the costs. While it is true that you could walk away with a significant chunk of money, you should also know that selling a home isn’t cheap. There are some major related expenses to be aware of.
Closing Costs
As the seller, you may be responsible for paying a handful of closing costs. These could include a series of taxes, title insurance, and escrow fees that can total as much as 2% of the purchase price. Of course, these costs are generally covered by the proceeds of the sale. This means that you won’t be paying any out-of-pocket closing costs unless you sell your home for less than what you owe. However, that doesn’t mean you should forget about them. Just like with any purchase, make sure the costs are worth it to you right now.
Real Estate Commissions
The going price for today’s realtors is sitting right at 3% of the purchase price. Because the seller generally pays for both the buyer’s real estate commissions and those of their own, you can end up with some pretty hefty fees. This means that real estate agents take 6% of the final sale price of the property. 6% may sound insignificant–until you do the math. On a $500,000 home, that is a staggering $30,000. Once again, these fees are usually subtracted from the sale of the home, which means that you never see the money. But don’t let out of sight equal out of mind as you decide whether or not to sell your home.
Repair Costs
When you sell your home you will often be required to make some repairs. Whether you take preemptive action or wait until the buyer’s home inspection, home repairs are never cheap. Requests for repairs are fairly standard in the process. At a minimum, you are required to pay for any repairs demanded by your state. These could include water damage, mold, and anything that violates building code laws. Repairs might also be included in your negotiations with the seller. With the right exclusion clauses written into the contract, your buyers can walk away from the deal penalty-free if the inspection uncovers major defects in the home and you refuse to make the necessary repairs.
Selling your home is a major decision. As you consider the best way to proceed, it’s important to understand the costs as well as the advantages of selling. Once you assess the costs and decide it is still worth it to sell, then go for it!
Check out this article on how to save money while making your house look great!
