What does it cost to sell a house
You’re ready to move on to a new adventure and are wondering, “What does it cost to sell a house?” Because selling something usually makes you think of making money, many sellers don’t realize how much money it can actually cost to sell a house.
You can crush your home-selling goals and make more money by planning ahead. So you can get through the turbulent waters of real estate, we’ll help you to understand the average cost of selling a house.
How much does it cost to sell a house?
Selling a house can cost up to 15% of the sale price. This includes closing costs, agent commissions and moving fees. For example, if you are selling a house for $250,000 you could expect to pay up to $37,000 to cover your selling expenses.
This may seem like a lot. Keep in mind that every seller will have a different selling price. You might even be able skip some selling expenses depending on your circumstances.
Here’s how a home-selling budget might look:
|Home sale price: $250,000||Seller’s Cost||Percentage for sale price|
|Commissions for agents||$15,000||6%|
|Total selling cost||$36,300||15%|
These numbers are just rough estimates of what a seller might spend to sell a $250,000 house. Let’s break down each budget item to get an idea of the cost.
Real Estate Agent Commissions
When you sell your house, the biggest expense will likely be the commission fee. This is a portion of your earnings that goes directly to the agents who helped you close the deal.
The standard commission is usually 6% of your home’s selling price, although you can save thousands by using a discount real estate broker (more on that later). This means that $15,000 will be split between the buyer’s and seller’s agents. That’s $7,500 per agent.
Does it make sense to pay for an agent?
There are many reasons to use a real estate agent. Because agents who live, breathe and eat real estate communicate the right expectations to make you feel comfortable throughout the selling process. They can help you prepare your house for buyers and provide a proven marketing plan to sell your home on your timetable.
Agents can also help you make more money by being a strong negotiator. In 2019, the median sale price for sellers was $280,000. That’s $80,000 more than those who didn’t work with an agent.
Agents who live and breathe real estate can communicate the right expectations to make you feel comfortable throughout the selling process. Agents can also help you make big money by being a strong negotiating partner.
A home inspection costs around $280 – $400 and can reveal problems with the plumbing, electrical, HVAC systems, roof, or foundation.
To avoid being bilked into buying a cash pit, the buyer usually pays for a home inspector. If you plan ahead, you can save money by having a home inspection done before you list your house. This will ensure that home repairs don’t delay the closing or cause buyers to rush to alter their offer.
Major home repairs can cost between $4,000 and 18,500. These are the repairs you may need to make after the home inspection. Obviously this is one area where different sellers will experience wildly different numbers.
If your house is brand new, there will likely be few things to do. If your home is a bit older, however, it may need some attention.
Last year 73% of sellers did at least one improvement before they sold. These included landscaping, remodeling bathrooms and kitchens and replacing flooring or carpeting.
Home staging costs between $450 – $1800. Stage your home to make it more appealing to potential buyers. This will result in higher prices and a shorter time frame.
Costs associated with staging include hiring a company to stage your home, hiring a cleaning service, renting furniture, upgrading cabinets, and installing brighter lighting.
You may be able to avoid hiring a staging company if you have nice looking furniture and if you can clean the home very well and declutter it yourself.
Potential buyers don’t want to see pictures of your family everywhere and bookshelves full of your books. You want them to be able to visualize themselves in the home, not feel like a guest in someone else’s.
Realtor.com reports that sellers usually pay between 1% and 3% in closing costs to close a deal. Closing costs for sellers usually include the cost of an attorney, title company, title transfer, and taxes.
Sellers may offer to cover some of the closing costs for buyers in order to sweeten the deal. This is known as a seller concession.
Moving out of your home could cost you between $600 and $1,700. This figure, of course, can vary greatly depending on how far you are moving and how much you are willing to do yourself.
Long distance moves can easily cost thousands of dollars.
Rest of the Mortgage Balance
You will need to pay the loan balance if you have a mortgage. This should be paid by the proceeds of the sale.
Say, for example, there is a $120,000 balance that remains after paying your mortgage for 10 years. Let’s say you sell your house for $250,000. You take $37,000 from the sale proceeds to pay the selling expenses, and $120,000 to repay the mortgage. This leaves you with $93,000, which is a nice down payment to buy your next home.
You shouldn’t sell your house if you are underwater or upside down on your mortgage (meaning your loan balance is greater than your home’s current value). You wouldn’t be able to pay your mortgage if you sold the house.
If you are upside down, don’t panic and continue paying your mortgage. Let the home’s value grow until you have enough to pay off your mortgage. That is unless you have the additional funds to pay the remaining balance yourself.
How can I reduce the cost of selling my house?
Grab your power tools and safety glasses. One way to cut down on home-selling expenses is to DIY-style tackle home projects. You could save money on your home staging and repairs if you are skilled in landscaping, carpentry, or painting.
It is also possible to cut down on your moving costs. You can start by clearing out junk and selling things you can replace. This will reduce moving expenses. Ask your department store for free packing boxes. You can also save money by asking friends to help you pack. Make sure you thank them with large pizzas!
The easiest way to save money selling your house
The easiest way to make more money when you sell your home is by hiring a discount real estate broker. Discount brokers and agents do the exact same things as more “traditional” real estate agents. They just do so for a reduced fee.
This is because they utilize current technology to reduce the workload and can therefore take on more listings at a time. Then they pass those savings on to you, the seller.