The housing market is thriving, and there’s a shortage of inventory in certain areas. Consequently, some home sellers are receiving top dollar from the sale.
If you’re considering putting your home on the market, you could turn a profit on your home. But before it hits the market, there are costs you’ll incur to prepare your home for sale and finalize the transaction.
On average, you’ll spend around 10 percent of the sales price to sell your home. So, if you expect your home to sell for $425,000, you can deduct $42,500 from your projected profit.
Submit an online application form to inquire about Angel Oak Mortgage Solutions financing options.
Buy a home or refinance your existing mortgage with Zero Mortgage.
Older homeowners can get peace of mind and added financial security with a reverse mortgage from AAG.
Costs Of Preparing Your House For Sale
Before you list your home for sale, there are several costs to consider.
Home Repairs
Although the competition is fierce in some markets, you could get more for your home by making necessary repairs and minor cosmetic upgrades. However, be mindful that a significant issue ignored by the homeowner and later identified by the home inspector could cause a deal to fall through. Or, if the prospective buyer decides to move forward, it could be contingent upon the seller resolving the issue or reducing the sales price to compensate for the cost of repairs.
Landscaping
If you’ve kept your lawn in tip-top shape, investing in landscaping may not be necessary. But if it’s been a while and you need to spruce things up by installing new sod, flowers, mulch, trees and fertilizing the lawn, you could spend around $3,000 to get the job done.
Professional Cleaning
A deep clean can make your home shine. You have the option to hire a professional cleaning company to tidy up your place or take the DIY route. It’s possible to rent a deep cleaner and purchase the supplies you need for $100 or less. Or you can hire a professional to do the work for you for under $1,000.
Home Staging
Staging your home helps potential buyers envision what it’s like to live in the property. You could attract better offers to your home by investing in a professional stager, but it comes at a cost. Generally, you’ll spend several hundred or thousands of dollars, depending on the size of your home, unless you opt to stage it on your own.
Submit an online application form to inquire about Angel Oak Mortgage Solutions financing options.
Buy a home or refinance your existing mortgage with Zero Mortgage.
Older homeowners can get peace of mind and added financial security with a reverse mortgage from AAG.
Costs Of Selling Your House
Once your home is ready for listing, you’ll incur these expenses.
Home Inspection
You’re not obligated to get a presale home inspection. However, it could be well worth the investment of around $400 or more, as you’ll know if there are issues with your home before you list it for sale. You’ll also have the opportunity to make mechanical or structural repairs and prevent potential buyers from offering you less than what you hoped to get for your home.
Real Estate Commission
The seller pays a commission between 5 and 6 percent of the sale price. It’s generally split between the buyer’s agent and the seller’s real estate agent. To illustrate an example, if your home sells for $380,000, you’ll pay between $19,000 and $22,800 in real estate commissions and realtor fees. You can get some alternatives to sell your house without a realtor to avoid some of these fees.
Closing Costs
The average cost range between 1 and 3 percent. They include attorney fees, accrued property taxes, recording fees, transfer taxes and the closing fee.
Seller Concessions
Did you offer to pay a portion of the buyer’s closing costs to make the deal more appealing? This is referred to as a seller concession.
Be mindful that there are limits on the amount of concessions the seller can offer, depending on the loan product:
- FHA loans: limited to 6 percent of the lesser of the appraised value or sales price of the home
- USDA loans: limited to 6 percent of the loan amount
- VA loans: limited to 6 percent of the purchase price or appraised value of the home
- Conventional loans (less than 10 percent down): limited to 3 percent of the lesser of the appraised value or sales price
- Conventional loans (between 10 and 25 percent down): limited to 6 percent of the lesser of the appraised value or sales price
- Conventional loan (more than 25 percent down): limited to 9 percent of the lesser of the appraised value or sales price
- Conventional loan (investment property): limited to 2 percent of the lesser of the appraised value or sales price
Buyer Home Warranty
Another way to entice prospective buyers is by offering a home warranty. It shouldn’t cost you more than $600 for a short-term warranty and could give the buyer peace of mind knowing they won’t have to come out of pocket to cover a hefty repair if something breaks shortly after closing.
Costs Incurred After You Sell Your House
When you sign on the dotted line at closing to finalize the sale of your home, you can breathe a sigh of relief that the deal is wrapped up. Still, there are a few more costs to keep in mind.
Capital Gains Tax
You could be subject to capital gains tax if you sell your home within one year of moving in. But if you own your home for at least five years and live it in for at least two of those years, it’s considered your primary residence. Even better, you could exempt up to $250,000 of the profit ($500,000 for married couples) from capital gains tax if you decide to sell the home after five years.
Moving Expenses
The total cost of moving can range from under $1,000 to over $4,500, depending on the distance of the move and the items you’re bringing along. You could curb costs tremendously by tossing things you no longer need before moving or renting a moving truck to handle the move on your own.
