Many people are not aware that there is a cost to be incurred when selling their homes. There are several costs incurred that can end up to approximately 10% of the selling price. Selling a house is a bit different from selling other assets like vehicles because the owner of the house is the one to incur these costs of selling. The buyer’s agent will, therefore, include the costs of selling the house in the contract. A home seller should be aware of what to have as a part of the cost of selling the house.
The following are the cost incurred while selling your house:
1. Realtor’s fee
The Realtor fee is a payment you pay to the Real Estate Commission. The realtor’s commission fee is 5-6% of the total cost of your sale. This expense is the biggest compared to the other cost you will incur while selling your house. However, the realtor’s fee is negotiable, depending on how much you will be able to negotiate with your real estate agent. Home sellers can avoid the realtor’s fee by listing their houses as For-Sale-By-Owner (FSBO). The action will force the seller to do all the functions done by the real agent, including showing and negotiating the price of the house to the prospective buyers, hiring a lawyer to draft the contract, and overseeing the title transfer process.
2. Home repair costs
The home repair cost is for making your home more appealing to potential buyers. The home repairs are in the form of an upgrade of the exteriors of the house, minor cosmetic works like painting the interior of the house, and repairing any broken structures within the house. Problems noted by the buyer during inspection lowers the price of the house. However, Contracting of home buyer companies like Avante Home Buyers is a way of avoiding home repair costs by home sellers. The home buying company will buy the house from you and get a seller for the house without incurring repair costs.
3. Pre-sale inspection cost
The pre-sale inspection cost is the fee charged by the inspector you contract to inspect any structural and mechanical problems in your house before an inspection by the buyer. By the time the buyer’s inspector comes in to check the house, you will have solved the problem.
4. Utility costs
Expenses that occur before the house gets a new owner include bills like water and electricity bills. A home without utilities such as water and electricity to power lighting and air conditioning is less appealing to buyers; hence the house seller must pay the bills till the house gets a new owner. The utility bills are paid by the seller of the home so that by the time the buyer settlers in the place, there will be no outstanding house bills.
5. Closing costs
Closing cost is the additional cost incurred while paying homeowners association fees, capital tax, title insurance, attorney fees, property taxes, brokerage fee, escrow fees, courier fee, and transfer taxes. The additional cost may add up to 4% of the total sale. Home sellers can negotiate with the buyer on who to pay for some of these extra costs. The seller doesn’t have to incur the fee alone, but they can reach an agreement with the buyer to have him or her cater half of the price or more.
To know how much it costs to sell a house, home sellers can use an automated home sale calculator. Homeowners should try and reduce the cost of selling their homes to reap more returns from the sale.