Have you recently decided to sell your house? If so, you may already have been told about the crazy workload and the immense amounts of stress and hassles that are typically involved in this process. Real estate professionals, or friends and family that have experience selling their houses, might have already told you about all the heaps of paperwork that you’ll need to fill in and submit on time (from listing agreements to mandatory disclosures). They may have also mentioned how you’ll need to deep clean, de-clutter, and stage your property like an expert before inviting potential buyers for showings, which is a full day worth of strenuous labor.
They may even have told you about all the time and energy you’ll spend catering for your property’s various structural issues, and making sure that all the required repairs and upgrades are met. As such, you are likely to have already learned all of these things before making your final decision to sell your house traditionally; due to this, you’ll know what to expect and will be prepared for the grueling months ahead.
Be that as it may, one thing that most people won’t mention (especially if their real estate professionals who are looking to shmooze you into hiring them) is the monetary cost to sell your house, and the sheer volume of expenses you’ll incur before everything is said and done. Not many people will tell you this, but when it comes to selling your house, it takes money to make money. As such, this is something that you should be aware of before you finally decide to pull the trigger.
What is the True Cost to Sell your House?
Selling a house is quite an expensive venture. However, for most people, these expenses tend to creak up on them one at a time. Your agent will likely be very open and honest about the big costs such as their commission, as well as the listing fees they’ll require you to pay in order to get your property up on popular sites such as the MLS and Zillow.
However, they likely won’t mention the laundry list of other smaller expenses that will be bound to come up before the home sale process concludes. For most home sellers, these expenses will only be mentioned “as they come up”, and they’ll be quite minimal so you may not notice them until it’s too late. It will be a 20 dollar charge here, and a 100 dollar charge there… however, when you tally it all up, you’ll see that these expenses are actually quite significant.
But What are These Expenses?
In this blog, we are going to talk about some of these expenses, and show you how much it cost to sell your house. After you’ve gone through this list, you’ll have a better understanding of the costs involved when you decide to hire a real estate agent and sell your house traditionally, which will be sure to prepare you for the road ahead.
So let’s get started…
Real Estate Agent’s Commission
One of the most obvious cost to sell your house that you’ll incur when you decide to sell your house traditionally is your real estate agent’s commission. This expense kind of goes without saying; if you’re going to hire someone to sell your house, it’s pretty obvious that you’ll need to compensate that person for their efforts. On average, the agent’s commission that you’ll sign on for in your listing contract will be between 3-4% of the final sale price.
However, what most home sellers don’t know, and won’t find out until it’s too late, is that the actual commission that you’ll end up paying is typically between 6-8% of the sales proceeds. This is mainly because when you’ve found a buyer and negotiated a fair price, they’ll expect you to cover their agent’s commission from the sales proceeds as a way of sweetening the pot. Though this is not a set rule, it’s rare to find a buyer who’s willing to fund their agent by themselves; as such, you should always be prepared for the high possibility.
Advertising and Staging Costs
Home sale advertisement is a sinking hole that swallows up money like nothing else when it comes to selling a house. While it’s important to advertise (because no buyers will show interest in your property and contact you if they have no idea that it’s being sold in the first place), the sheer amount of money that most home sellers pump into this process is enough to make anybody’s head hurt.
In the old days, you could simply pitch a 10 dollar “For Sale” sign on your front lawn, and the buyers would come flooding in. However, as the real estate market has grown and become a whole lot more competitive, things have certainly changed. These days, while a buyer may see your property physically and get interested, they’ll also know that there are millions of similar properties listed online, some of which might actually be cheaper and better than yours. As such, they’ll jump on a popular site and start flicking through listings for the best deal.
Because of this, it’s necessary to make sure that your property is listed on all the popular real estate sites, and that the listing stands out with beautiful vibrant pictures (which will usually require you to hire a professional photographer). Just like you need a stellar lead generation process in sales, it will take a lot of your efforts in order to garner the attention of prime buyers for your home.
In addition, covering all your bases by adding print advertising (e.g. listing on the classifieds section of popular newspapers and magazines) will be sure to help get your house sold that much faster. But this will all cost you a pretty penny.
Cost of Repairs and Upgrades
Unless you intend to list your property in “as-is” condition (which will significantly decrease its value), it will be absolutely necessary to make sure that all essential repairs are made. No one is going to pay full price for a fixer-upper property; as such, you’ll need to spend the money required to fix up your home, as well as to add a few bonus upgrades like caulking that will make your property a whole lot more appealing for buyers (such as a new paint job or a kitchen/bathroom remodel). And home repairs aren’t cheap.
Cost of Professional Inspections and Appraisals
Next up, we have the cost of professional appraisals and inspections. Property appraisals can be great documents to have when it’s time to negotiate sale prices with your buyer. They clearly outline how much your property is worth, which will be a great tool when it comes to avoiding low-ball offers. Be that as it may, it’s not absolutely necessary to get a professional appraisal conducted, so maybe you can avoid this charge.
However, home inspections are mandatory in most cases. These days, an educated buyer (which is most of them) will request an inspection to be conducted and write it as an absolute necessity into your contract, as part of their due diligence. As such, it would be wise to factor these costs to sell your house into your overall budget.
And last but not least…
Closing Cost to Sell your House
Most buyers think that everything concludes when the contracts are signed. All the work, stress, and hassles that they would have had to put up with, and all the money that they would have spent during their home sale, would have finally come to an end. And it will all be worth it because their house will finally be sold. Great right?
Well, the reality is that though you will get to walk away richer, there is still one last expense that you’ll have to cater for at the very end. These expenses are commonly known as closing costs to sell your house. They cover HOA fees, attorney fees, and prorated property taxes, amongst other things.
So there you have it. Here is our list of costs to sell your house that you’ll have to cater for if you find yourself selling your house traditionally.
If you have enough money to proceed, you can do so knowing what to expect. However, if you don’t have the money required to fit all of these various hefty bills, you should consider selling your house directly to a cash buyer instead. They’ll accept your house in “as-is” condition (meaning no repairs or upgrades required) and will be prepared to close in as little as a week.