While it is true that the current real estate market is extremely competitive, with many offers and even bidding wars becoming commonplace, many would-be sellers still fail to account for the costs associated with actually selling their house. While there may be room for haggling over certain closing costs, sellers should plan to pay for most of them themselves. To what extent will it cost? As a general rule, the seller will cover the real estate agent's commission, which averages between 5% and 6% of the purchase price. You should allocate 2-4% of the purchase price for miscellaneous charges, such as legal fees and transfer taxes. See below for a breakdown of the common expenses incurred by sellers, along with ballpark figures.
Cost To Put A House On The Market
What Are The Costs Of Real Estate Commissions?
Traditional real estate commissions have ranged from 5% to 6% of the sale price, making it the largest expense for a seller to consider. For example, if you sell your home for $300,000, the commissions you pay might be as high as $18,000. The listing agent and the buyer's agent will receive a portion of the commission. The vendor often covers this. However, you might try bargaining for a smaller commission. When a rapid sale is anticipated, the local market is robust, or the home's asking price is high, the real estate agent may be more amenable to a smaller commission. There are plenty of "for sale by owner" listings on the market because homeowners would rather not pay a commission to a middleman (FSBO). Expect to take on the responsibilities of an agent if you do this.
Costs Of Closing
The buyer pays a large portion of the closing costs in a real estate transaction. However, sellers also have to pay some fees at closing. Even though it is unusual in today's seller's market, you should be prepared to pay for some of the buyer's fees. HOA dues, property transfer taxes, and title insurance are all potential extras. Escrow fees, broker commissions, and shipping costs could be added. Additionally, the expenses for a real estate attorney's services will be required at closing if one was retained to assist with the contract negotiations.
Home Maintenance
You may have to foot the bill for costly repairs like a leaking roof or broken pipes if they appear during your home inspection. If you anticipate major repairs to be necessary before selling, you should save up as much money as possible in case of an unexpected financial setback.
Utilities
Utilities should be paid until the house is sold, even if the occupants have moved out. It might be challenging to find buyers for a home that does not have working air conditioning, heating, or lights. The monthly cost of keeping utilities on while you wait for a buyer to move in can be estimated using your current bills. As you won't be occupying the space, you can take measures to minimize your utility costs.
Paid-Off Mortgage
Your mortgage will be paid off with the money from the sale of your property, but the amount shown as paid off on your mortgage statement is likely to be less than what you owe. Accrued interest on a prorated basis will need to be added to the final bill. If your mortgage has a prepayment penalty, you may also have to pay a charge. To see if this stipulation is included in your loan, you can either check the terms of your loan or get in touch with your lender.
Conclusion
The question then becomes, "How much does it cost to sell a house?" when you've finally decided to sell your home and go on a new journey. At the closing table, some sellers may be blindsided by the amount of money they could have invested in selling their house. But you won't be the one to fall into that trap! Making a budget in advance for the costs associated with selling your property will help you achieve your financial goals and come out on top. To help you weather the real estate market storm, we'll outline the typical expenses of selling a home. The true cost of selling a house, which may quickly add to tens of thousands of dollars, may not become apparent to many sellers until they sign documents at the closing table. Costs associated with selling a home often amount to between 10 and 15 percent of the transaction price.
