Are you getting ready to sell your home?
Let’s face it, selling your home can be a costly experience. Not only do you have to pay a significant real estate commission to the buying and the selling agent, but you also have to consider pre-listing costs as well as the applicable taxes.
To ensure that you’re as prepared as possible, it’s crucial to understand all of the costs associated with selling a home. In doing so, you can be sure that you’re as prepared as possible for your sale.
If you’re getting ready to sell your home, this one’s for you. We’re sharing a list of the costs associated with selling a home in today’s market.
Commission Fees
First and foremost, the seller is responsible for paying the real estate broker commission.
Of course, most sellers are aware that they must pay a commission to the listing agent. After all, this agent is listing their home for sale and conducting a large degree of the work from beginning to end.
However, what many sellers are unaware of is the fact that they’re also responsible for paying the buyer agent’s commission. When we consider that 89 percent of buyers purchase a home with a realtor, it’s simple to see why factoring in this cost is so important.
While some fees can be negotiated, there is a standard fee that the majority of real estate professionals will abide by. Of course, this fee will differ based on your location. For example, the typical commission fee in Florida is 6% and is divided equally between the listing agent and the buying agent.
Services Taxes
In today’s world, most services are going to have a tax associated with their service fees.
As it turns out, real estate is no different. In addition to paying your real estate broker’s commission, you’re going to want to prepare to pay the affiliated tax on top of this fee.
This is something that not all sellers are aware of and often comes as a surprise when it’s time to write the commission check. To ensure that you’re as prepared financially as possible, it’s important to plan for taxes at the beginning and factor them into your final costs.
Capital Gains Tax
When you sell a home at a profit, you may be required to pay a capital gains tax.
For many, this will be dependent on whether the property is a primary home or a secondary home. As a general rule, primary homes are exempt from a capital gains tax whereas secondary or investment properties must pay this tax. For a home to be considered your primary residence, you should live in this home on a relatively full-time basis.
If you’re unsure as to what you’re responsible for paying, be sure to speak with your accountant. These taxes must always be reported on your federal tax return and are incredibly important. Without paying these taxes correctly, you could face significant fines and consequences.
Staging
To stage or not to stage? For many sellers, this is the question when it comes to listing their home for sale.
If you’re looking to sell your home quickly for cash, staging will almost always prove to be a useful tactic. With professionally staged furnishings, buyers are better able to envision the potential of the home.
While some real estate professionals will offer to pay for staging, this isn’t standard practice. Instead, this is a fee that is often negotiated between the real estate representative and the sellers.
Repairs and Replacements
Do you have any major repairs that should be conducted prior to selling?
When it comes to listing your home, you want to ensure that it’s presenting as well to buyers as possible. While this doesn’t mean that you’ll need to invest thousands into renovations, you want to be sure that minor repairs are being taken care of.
This could be anything from repairing holes and cracks in the walls to fixing broken appliances and fixtures.
Storage
Before listing your home for sale, you’re going to want to conduct a deep clean from top-to-bottom. Once you’ve cleaned the home, it’s time to move onto the process of decluttering.
With this, the goal is to free your home of personal items and overarching furnishings. Remember, you want prospective buyers to be able to imagine their own furniture in the space. When it comes to listing your home for sale, it’s safe to say that less is more.
Of course, this doesn’t mean that you have to discard these items entirely. Instead, it’s best to rent a suitable storage unit so that you can temporarily relocate these items. These units can often be rented on a weekly, monthly, or even annual basis.
Home Inspection
Are you looking to increase the appeal of your home? If so, it’s best to showcase buyers as much information about the home as possible.
While this report is optional, it provides useful information about the home to anyone that comes through the door. Generally speaking, the report will outline the general health of your home and highlight any major features, dates, and areas of concern.
When a buyer has access to this material, they can feel more confident in moving forward with an offer. Having the report on-hand is also going to speed up the buying process overall. This saves prospective buyers from having to conduct their own home inspection at their own expense.
Of course, every home inspector will carry different fees. However, you can expect to pay anywhere from $300-$500 for the entire report.
Closing Costs
Generally speaking, the majority of closing costs are the responsibility of the buyer.
However, there have been circumstances where the seller has been responsible for paying at least some of the closing costs. Of course, this is more typical in a buyer’s market where the buyer tends to have more power.
These closing costs can include anything from title insurance and lawyer fees to an escrow fee and even postage. To understand the lengths of your closing costs, be sure to discuss this with your lawyer in advance.
Costs Associated With Selling a Home
Before you decide to list your home for sale, it’s crucial to understand all of the costs associated with selling a home.
Not only will this ensure that you’re financially prepared, but it will also help to minimize the stress associated with moving in the first place. After all, moving is considered to be one of the most stressful life events. To help, be sure to use this guide to educate you on what you’re responsible for paying as the seller.
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