When getting into the seller’s market, you already knew that you have to pay your real estate agent, which could be a commission averaging at 6% of the sale, depending on where you live. However, there are several other fees for selling a house you should be aware of.
Generally, selling property costs a lot, and you should expect to part with as much as 10% of the total home price in fees. There is so much to factor here, including repairs, insurance, agent fees, closing costs, and more. In this post, we’ll explore all the fees associated with selling a home, and help you prepare for it.
The Real Estate Agent Commissions Fees
This is, by far, one of the most significant fees for selling a house. Six per cent of the total amount may not seem like much, but when you do the math, you’ll discover it’s quite a hefty amount. The thing is, this percentage will be split between your real estate agent and the buyer’s agent as well, some of which they may also have to share with their brokers.
There’s a lot that goes into selling a home. You’ll be paying your real estate agent for assisting you in pricing your home, marketing it, negotiating with the buyers for the best possible price, and advising you about other aspects of the sale. You may or may not be able to negotiate the price with your agent, and may even find one that offers discounts.
You should also expect closing fees for selling a house. Homebuyers pay a lot more for closing fees, but home sellers must be ready for some fees as well. For instance, if you put money into escrow, you and the buyer will incur fees and split them between yourselves.
You may also have to pay title fees. You see, while selling your home, the potential buyers will request a title search to ensure you own the house, and it’s free of any judgments, liens, and bankruptcies. The buyers’ lender will also need title insurance policies so they can protect themselves against forgeries, fraud, and other title issues that could arise.
Most of the time, buyers cover these fees, but you need to be prepared. You’ll also need to pay a nondeductible transfer tax, which will be based on the value of your home. This tax covers deed transfer to new owners, and it’s among the fees for selling a house, together with reconveyance fees.
If you’re selling your house together with a piece of land, you may also want to know how to sell land fast and cover both bases at the same time. Besides that, you may also have to pay homeowners association fees and a pro-rated amount of your property taxes.
If you’re selling your home in a buyer’s market, the sales are likely to be slow. In this case, you may have to pay some of the closing costs for the buyer for them to afford the house.
Inspections and Repairs
When a buyer finally signs a purchase offer, they will schedule a home inspection. An inspection will determine whether the house has any underlying issues that could compromise its safety and impact its value. As the seller, you won’t have to pay for the inspection, but the issues found will open negotiations.
Depending on the findings, the buyer will make requests on making the repairs or lowering the price so they can do it themselves. Necessarily, you can either choose to do the repairs, offer to cover the cost of the renovations at closing, or refuse and find another buyer.
Staging and Prepping Fees
Presentation is a significant part of selling your home. This doesn’t necessarily mean remodeling all the rooms and making it look brand new, but you should do some light prep work and keep expenses at a minimum. Start by deep cleaning and decluttering your home, then depersonalize it, which will give potential buyers an opportunity to view the house as their home.
You can opt for professional cleaning services or enlist your family and friends to help. Most homebuyers prefer neutral colors as opposed to bold ones, which makes repainting your walls one of the costs of selling a house. You can also freshen up your flooring, replace any worn out and dingy carpeting and boost your curb appeal.
Boosting curb appeal is one of the major aspects of boosting the marketability of your home. So ensure you mow the lawn, edge the walkways, fertilize the grass, and pull up weeds. All this will cost you a considerable amount.
Stage Your Home to Appeal to More Buyers
Staging has proven to be an effective part of selling a home. While you can do it, to prevent potential loss of prospective buyers, you may prefer hiring a professional company to do it for you. The associated costs are among the fees for selling a home, but the price will be well worth it if you attract the right pool of buyers.
Property taxes are among the most vital fees of selling a house, and it can be quite tricky. If you haven’t been paying and you have arrears, you’ll need to clear up all the fees and bring the taxes up to date for the buyer. Beyond that, you may have to pay the pro-rated amount the day the home sale closes.
Mortgage Repayment Fees
Most homeowners use part of their sales funds to cover the rest of their mortgage. If you plan to do the same, you may incur some fees for paying your mortgage too early. Depending on the lender, you may have to pay other prepayment fees, like a huge chunk of the total interest you would have owed the next six months.
Fees for Selling a House: What You Should Be Ready For
These are some of the costs and fees for selling a house most homeowners encounter. However, your costs will vary based on certain factors such as the value of your property, the condition of your home, and the current housing market, among others. Understanding these fees means you won’t be caught off guard and will do whatever is necessary to reduce them.
If you’ve found value in our post and would like more informative pieces, head to our blog section, where we have more on real estate, property management, and home finances.
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