Wed. Jun 7th, 2023

How Much Does it Cost to Sell a House?

Costs associated with selling your house can quickly add up, but if you know what to expect and can keep expenses under control, selling without spending an excessive amount should not be difficult.

Real estate agent fees are one of the major expenses involved with selling your home. They may vary depending on factors like your location and desired method of sale.

1. Real Estate Agent Fees

Real estate agents typically make their living by charging commission on home sales. This fee typically constitutes a percentage of the sale price and can often be negotiated directly between agent and seller.

Commission is used to pay your agent for his or her time and effort in creating listings, organizing tours, negotiating with buyers and conducting research. In addition, this cost covers costs related to marketing your home such as photos and signage.

Prior to listing your house for sale, it is wise to negotiate the fee of the real estate agent involved and avoid any unpleasant surprises later.

A good realtor will work closely with you to make sure that you understand their fees and their method, as well as assist in identifying what improvements would add the most value to your home. They will help guide your decisions as to what investments would add or detract from its worthiness.

Realtors not only earn commissions from clients they refer, but they may also collect referral fees as an added source of revenue. A skilled agent could find themselves making extra cash with this strategy!

Your real estate agent will negotiate an asking price that reflects the current housing market, as well as offer concessions such as paying for home inspection or title insurance policies.

Opendoor data shows that these expenses typically don’t exceed 1.5%-2% of the sales price of the home being sold, according to Opendoor’s estimates.

Moving costs vary significantly depending on the distance and type of packing service that is hired to help. When moving within 100 miles, expect to spend between $800-2,200.

Budget for all these costs to ensure you can sell your house quickly and for top dollar, thus securing your dream home while preventing unpleasant surprises down the line.

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2. Appraisal

When selling a house, there are a variety of costs you must cover in order to be successful. This includes appraisal fees and marketing expenses which will ensure your home sells quickly for top dollar.

An appraiser will assess the value of your property based on data derived from similar properties that have recently sold in your area, while also conducting an inspection to ascertain its condition and any improvements which have been made.

Appraisals are an integral component of home buying because they help lenders assess a property’s market value – the price it would likely fetch on the open real estate market if listed for sale.

Your lender will order an appraisal depending on the type of mortgage loan you take out after accepting a purchase offer and signing the purchase contract, or when refinancing existing mortgage loan(s).

Once you know your appraisal cost, work with your agent to find ways to reduce or even eliminate the amount you owe. For example, hiring a professional photographer at minimal expense might help.

An appraisal is a comprehensive report that includes an inspection of your property by an appraiser. They will consider all aspects of it that could impact its value, such as lot size, upgrades/additions made, comparable sales information and size of lot.

An appraisal is a legal document that provides you with a defensible opinion of the value of your home. Conducting one before listing it for sale will give you an increased understanding of its current market value as well as ways you can increase it further.

3. Marketing

Reasons why you might decide to sell your home may vary; whether it be to move into a different area, take up work in another state, or upgrade living spaces – selling is always a big decision and should only be undertaken when necessary.

One of the major costs involved with selling a home is real estate commissions, which is shared between both agents. Each gets their portion, typically between 5-6 percent.

Other expenses related to selling your home include listing fees, appraisal costs and closing costs – though an astute seller might find ways to cut these expenses through research and conducting their own investigation.

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Marketing your house is also an integral component of the process, and should not be neglected. An effective advertising campaign will not only introduce more buyers to your property but could save you money in the long run.

An effective marketing plan involves everything from creating a competitive list of competitors and using online and social media to promote your home’s features to taking advantage of current real estate trends like smart home technology, high-end interior design and smart storage solutions. It’s key that your marketing strategy contains tactics that appeal to both buyers and sellers; for assistance on how best to proceed contact a professional real estate company for guidance.

4. Home Inspection

Home inspections are an integral component of real estate transactions. A home inspection can uncover hidden damage, additional expenses and discrepancies between what was listed online and the true state of the house – giving you more leverage when negotiating the sales price.

Inspection fees vary based on the size and location of the property being examined, typically taking two to three hours in duration and typically covering elements such as foundation, structural components (walls, ceilings and floors), roof attic basement HVAC plumbing electrical systems as well as fireplaces.

In cases where inspection reveals major flaws, buyers can either choose to back out of the deal or renegotiate its price; sometimes sellers even provide credit towards repairs costs.

Before hiring a home inspector, be sure to ask questions regarding their training, experience and pricing before making your selection. Also ensure they adhere to InterNACHI’s Standards of Practice for optimal results.

Home inspections typically last two to three hours for single-family residences, while multi-family properties often take longer due to more systems to inspect. When hiring an inspector, make sure they offer specialty services like inspecting for radon gas, termite infestation, asbestos fibers in pipes or paint, lead paint piping systems or paint, mold growth or water damage damage assessments.

Inspectors should deliver a comprehensive report that includes photos and recommendations for further evaluating problem areas. You should discuss this report with your real estate agent to see how it will impact their decision to buy or sell, then have the inspector walk through with you while answering any of your queries.

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5. Closing

After accepting an offer on your home, closing fees associated with the transfer of ownership must be paid. These fees vary based on its value and loan type; their costs depend on both variables.

Closing costs for mortgage loans often include title insurance, inspections and appraisals. Your lender should provide a Closing Disclosure document detailing each cost you must pay at closing.

Buyers should also anticipate ongoing expenses associated with homeownership, such as property taxes and homeowner insurance premiums. While some fees can be negotiable depending on your local jurisdiction, others will require payment in full regardless of negotiated agreements.

Sellers can help offset closing costs by including buyer incentives in their sales contract, such as paying some or all of a buyer’s closing costs or offering to cover part of an inspection report.

These incentives may entice potential buyers to submit higher offers; however, they cannot guarantee to increase your home’s sale price.

As a seller, it is crucial that you set aside enough funds in your bank to cover closing costs when selling your home. Doing this will reduce how much of your net proceeds go toward covering these costs and allow for more of your net proceeds when selling it.

An effective way to lower closing costs is working with an experienced agent, who can guide you through every stage of selling your home. They are familiar with local trends and will know which features buyers are seeking out in your neighborhood.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.