What Are the Total Costs of Selling a Home?

The Costs of Selling a Home May Surprise You!

The housing market is hot for sellers now, with high offers and bidding wars on many properties. While this is excellent news for anyone selling (because most people hope to come out ahead), you should keep in mind that closing on the house will also cost you money.

Selling a home can be complicated, and there are many additional expenses to keep in mind if you’re in this position. You’ll be responsible for things like paying the realtor fee, home repairs, and mortgage payoffs, to name a few. While many of these can be negotiable costs, they should still be added to your bottom line during the process!

Below are examples of typical seller costs and their prices so you can get an idea of what you’ll cover during your home sale.

Real Estate Commissions

During a home sale, there is a commission split between the seller’s and the buyer’s realtor. There is sometimes room to negotiate on this commission, and realtors may be more likely to lower their percentage if a home is expected to sell quickly or the price is relatively high. Generally, real estate commission tends to be around 5-6% of the total sale price.

You can technically list the property without using a realtor, which is called ‘for sale by owner’ (FSBO), but remember that you would have to assume all of the duties of an agent. That can include showing the home to prospective buyers or handling the transfer of the title, to name a few.

In general, only about 7% of homes on the market are sold through FSOB. Unless you’re incredibly knowledgeable about real estate, finding the right agent to ensure the process moves smoothly is a much better idea.

Closing Costs

Most closing costs are the home buyer’s responsibility, but there are still some for the home seller too! You may be responsible for paying the HOA fees that you still owe, property and transfer taxes, as well as a real estate attorney if you’ve hired someone to negotiate the contract.

You may be responsible for home repairs as a seller too. If the home inspection uncovers significant structural issues, like a damaged roof or broken plumbing system, the buyers may ask you to fix them before closing the deal. Extensive repairs can cost a lot of money and take up extra time, so keep that in mind before putting your house on the market. Maybe you can fix some of the issues beforehand.

Mortgage Payoff

Unless you own your home outright, most of the sale proceeds will probably go towards paying off the rest of your mortgage. The total balance may include prorated accrued interest, which is the amount of interest gained on a debt. On top of that, you may be charged a prepayment penalty if that is included in your mortgage agreement.

Costs Can Vary for a Seller

Other costs worth mentioning are the moving costs, which can be expensive if you’re relocating from a large house or planning to live somewhere far away. Selling a home can also be a significant investment of time, depending on what repairs you’re getting done or if you’re waiting for the right buyer to make an offer. If you’ve already left the property, this can also add to your costs!

Most costs can be negotiated, and finding good deals on the above charges shouldn’t be difficult. If you need help selling your home, contact Linda Moore for more information!