I will not reveal anything earth-shatteringly novel if I say that selling a house is not just about receiving money in the exchange for a property. Before you can get the offer closest to your initial price (yes, chances are high you won’t get the exact price on the market) you will have to open you wallet quite frequently. What are some of those expenses? I am glad, you asked. Of course, these expenses will not cost you a fortune but they are still your money. So, if you are planning to sell your house then take a paper and a pen because we will calculate some of the hidden costs.
The Numerous Fees
Okay, I admit, I cheated a little here - fees are not so hidden. The most common fee is the commission fee paid to the Realtor. However, even if you decide to sell your property on your own, without a Realtor, there are still other fees such as closing costs and taxes. Let’s see what each of these fees means and how much they cost on average:
- The commission fee is paid to the real estate agent or the Realtor. Even though you can negotiate with the agent, you should consider somewhere between 4%-7% of the earnings, depending on your particular area. Remember you still want them to work hard for you.
- Closing Costs are usually paid either to the lawyer or to a company that does the final paperwork. The fee varies from area to area, but you can be expected to pay around 6-10% of the sales price. That is typically the total of all closing costs combined. That includes the real estate agents commision
- Taxes, in particular transfer and capital gain taxes. If the total value of your house is significantly high then you will have to pay capital gain tax. Transfer taxes are about $742 (based on an average tax rate of 0.38 percent) however, not all cities charge it. This can also be much higher and usually is in more populated areas closer to 1-2% of the sale.
Repairs and Staging
Unless you are selling a perfectly perfect house, you will spend a good chunk on cleaning, fixing and staging. Repair includes a fresh coat of color, landscaping, replacing any broken items like door knobs, in some cases even deep carpet cleaning. The fixing and cleaning part only will cost you around $1450. But that isn't inluding the items that can bring you more money. Thats just the minimum. Upgrades and large repairs can range dramatically from 10k to 100k or more. Now, let’s hop onto staging. If you are wondering what it is, then don’t look for another meaning. Furniture arrangement, decoration and professional photographs are some of the things staging services offer. Due to staging, you can make sure the prospective homebuyers will see the best side of your house for only $1208.
Storage and Moving Costs
Selling a house can be a synonym to moving elsewhere. The next logical step of selling a house is moving either to another country or house. In both cases, you will encounter moving and storage expenses. The realtor will definitely suggest you move all the boxes from garage to a storage unit, so you have to pay for it. If you are moving your belongings with your car then you’ll have to pay for gas. If you hired a truck then say hi to their bill. The moving costs are estimated to be around $800, given you hired a special service.
Other Ignored Costs
The previous expenses were the big ones but there are some small ones too that usually do not fall under the category of hidden costs. Nonetheless, at the end, they make up a good amount. One of such costs is the trash, you might not realize but some cities charge additional money for too much trash. Trust me, you will have dozens of boxes filled with trash and the price of throwing them away can reach up to $500.
Next off are pets, you never know who your homebuyer will be. Maybe he does not like pets or has allergies, that is why it’s safe to take the pets out. And whenever you are not able to walk them, you will have to pay someone to take care of them.
These numbers are not meant to scare you but to prepare you. As a homeseller, you can try to include some of these fees in the market price of your house. Or perhaps, you could start the repair a little early and ask your friend if they will look after your pet for awhile. Being prepared never hurt anyone, so keep these costs in mind and good luck!