When it’s time to sell your home, you’ll need to know how much it’s going to cost, especially if you have very little equity in the property. Closing costs could be up to 10 percent of the sales price and include a real estate agent’s commission and fees related to title and transfer. In some cases, the buyer may ask you to pick up some of his or her closing costs.
Selling Home Cost
Real estate agents generally charge 5 to 6 percent of the sales price of a home for their commission. You might think that’s a lot of money, but after you figure all of the time the agent puts into marketing your home and deduct the percentages paid out of that money to the buyer’s agent and the broker, the agent doesn’t get that whole amount. All of the advertising comes out of the agent’s pocket and reimbursed only if he or she is able to find a buyer for your home. Most agents do not receive a salary, so what is left after splitting the commission and the cost of advertising your home is the agent’s entire paycheck.
An agent provides marketing, professional photography, advertising support, takes the time to show the house, professional market knowledge, negotiating expertise and a wider pool of potential buyers that you could never reach yourself. Working with an agent also provides you with legal protection.
The rest of the closing costs include escrow expenses, transfer taxes, notary fees, outstanding property taxes, the balance on the mortgage, property association fees and other prorated items. This might amount to approximately 2 percent of the selling costs.
Controlling Closing Costs
The seller is able to shop around for some of the costs to lower the amount. As the seller, you are able to shop around for your attorney and a title company. You could also save a reissue fee if you have a copy of the title policy from when you purchased the house.
Home and Inspection Repairs
Most buyers will have an inspection before they buy the house. You will need to make repairs. Before you put the house on the market, make any repairs that will help sell the house, such as painting inside and out, replacing carpet if it’s worn or torn, repairing or replacing broken appliances and repairing damage such as holes in the walls.
The buyer will usually hire an inspector. You can expect to make certain repairs that the buyer asks or credit the amount against the price of the property. You could turn down the requests, but you may lose the sale.
Current Mortgage Payoff
The proceeds of the sale of the house will be used to pay off the current mortgage and any liens that have been placed on the house. If your house appraises for less than all of the liabilities against the house, you will need to come to the table with enough cash to pay everything off, in addition to the other costs listed.
It’s difficult to sell a house if the utilities are turned off. Buyers want to know if everything is working properly. Be sure to budget money to pay utility bills – electric, heating and water – while the house is on the market.
To help sell your home if it is empty, you may consider staging the home, especially if you plan on an open house. Staging adds furniture and accessories to help buyers picture how their furniture and personal items will look in the house. Staging generally costs between $600 and $1,000.
Contact On Point Carolinas Realty
If you are ready to sell your home, contact On Point Carolinas Realty to discuss your home’s sale with a real estate agent.