Hidden Costs of Selling Your House (And How to Minimize Them)
Did you know it actually costs money to sell your home? It’s true! But the good news is that you can prepare for the hidden costs of selling your house. And once you do, you can minimize those costs and keep as much of the money from the sale as possible.
Some people get excited when they see the dollar amount they can sell their home for. But it’s important to remember that this isn’t the amount you get to keep after closing. There are several expenses that go into selling a house, all of which affect your take-home portion.
Aside from paying off the rest of your mortgage, you can expect to pay 5-10% of your home’s value in closing costs.
Here are some of the expenses you can expect to pay as the seller:
Presale Home Inspection
This inspection should take place before you sell or even list your home. The report will show you trouble spots to take care of, such as a leaky roof, a busted water heater, or faulty plumbing. Dealing with these issues is crucial if you want to sell your home quickly and for market value.
Home Repairs and Preparation
Now is the time to take care of those nicked cabinets, broken door handles, and water stains on the ceiling. You may also need to fix or replace certain appliances, paint the walls, resod some bare spots in your yard, and replace rotted wood in your porch.
We also recommend staging your home. Yes, this is an extra cost, but staging goes a long way in helping buyers envision themselves living in your house—and they’re often willing to pay more as a result.
Real Estate Agent Commissions
The average real estate commission is 4.92% of the home’s sale price in California and 5.5% nationwide. If the buyer and seller both have agents, the two share the fee, usually with the seller’s agent getting slightly more.
Other Closing Costs
You may notice a list of closing costs you have to pay in your loan settlement statement.
The exact fees vary depending on what state, county, or city you live in and which broker’s office and title company you use. But typically, the list of closing costs will include:
-Attorney or settlement fee
-Underwriting and processing fees
-Title search fee
-Title closing fee
-Owner’s title insurance
-Owner’s title policy
-Lien search fee
-Transfer tax (In San Diego County, the rate is $1.10 for every $1,000 of property value.)
-Loan payoff fees
-Remaining property taxes
Your Remaining Mortgage
If you haven’t paid off your house by the time you sell it, you’ll need to use part of the sale price to pay the remaining mortgage. Depending on how much equity you have in the home, this can take a steep cut out of the sale price.
Will you need to hire a moving company? Do you need to do any renovations on your new home? Are you relocating and need to pay for travel? Many home sellers forget to factor in their moving costs. Talk to your real estate agent to see if they know of any great deals in this area!
How to Minimize Your Selling Costs
First, follow your agent’s advice when it comes to how much to spend on home repairs and staging. A professional will help you spend just enough to get top dollar—but not more than you have to.
Your agent should also be able to help you find quality yet affordable home inspectors, brokers, and title companies.
Lastly, negotiate with the buyer on closing costs. Typically, the buyer will pay for appraisal fees and their own home inspection (separate from the presale inspection). But your agent can negotiate to see if the buyer will cover other closing costs, too. And since we’re in a seller’s market, the odds are in your favor!
Looking for a professional real estate team with a proven track record of selling homes for top dollar? Contact us today or call 858-461-9612 to learn how we can help you sell your home and minimize your closing costs!