The Costs of Selling Your House
July 30, 2009
The costs of selling a house may not make or break your decision to sell whether you’re relocating, trading up, or buying a smaller home.Ã‚Â However, the costs can run into the thousands of dollars so they’re something you don’t want to overlook.Ã‚Â The first thing you need to consider if you are thinking about selling your house is why you want to sell it.
Unless you live in a cave, then you know it’s not a good time to maximize the amount of money you can make from the sale of your house. Are you looking to move up in size of house? Do you need to move for a job change? Or do you simply want a change of scenery? Make sure you are moving for the right reasons, because the sale of a house can be a costly endeavor.
Sales Agent Commissions (2% to 10% of the purchase price)
Depending on the value of the home, typically the seller ends of paying the selling agent’s commission and the buying agent’s commission. An agent can charge whatever they want for a sales commission, but typically 2% to 3% of the purchase price is normal. The agent may charge less for higher value homes and more for lower value homes.
By the way, if your agent brings in a buyer, you don’t save money, the agent just makes more commission. If a selling agent brings in the buyer as well, they charge a buyer’s agent commission as well as their selling agent commission.
Selling For Sale By Owner
If you choose to sell your home yourself, it’s not as tough as sales agents and brokers will make it out to be with the power of the internet. If you have a knack for utilizing the power of the web and you are willing to price your home at a reasonable price, you can sell it on your own. You will need to pay for some marketing efforts, but you can potentially save thousands of dollars selling on your own.
My wife and I found the buyer to our first home, a condo in Gainesville, FL, from a free ad on Craigslist. The problem that most for sell by owner (FSBO) sellers run into is that they price the property too high, and they don’t get any bites. You can use sites like Trulia and Zillow to help you find comps in your area to price your home correctly.
Property Inspection (typically $250 to $500)
Sometimes sellers will pay for an inspection as a concession to the buyer. It’s sometimes thrown in as a negotiation technique to sweeten the pot for the buyer. This is a nice gesture to pay for the inspection, especially if you are eager to sell the house quickly.
Home Repairs (varies)
Unless your home is pretty new, many property inspections turn up some issues that need to be resolved. You can choose to have the improvements made or sometimes the buyerÃ‚Â will agree toÃ‚Â do it themselves if you knock some money off the asking price.
Closing Costs ( about 1.5% to 2% of sale price)
The fees you pay for the lenders to handle all the paperwork when you hand over your house to the new owners aren’t cheap.Ã‚Â You can negotiate with the buyer on who pays the closing costs but in a “buyer’s market” you probably won’t have much success with that.
Moving Costs (varies)
After you sell your house, you obviously have to find somewhere new to live.Ã‚Â Be sure to factor in the cost of packing up and moving all your stuff and any days off of work you’ll need to move.Ã‚Â To help compete in a tough real estate market, we’ve actually heard of realtors who actually provide you one days use of a moving truck if you use them to sell your home.
We’ll cover some more financial considerations on selling your house in the days ahead. You can also read some ofÃ‚Â the tips from our series on buying a home, with details on home inspection tips, split loans, down payments, interest rates, and mortgage pre approval.
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