Almost all home sellers want to make the most out of their property. Usually, home sellers pay most of their attention to the profit. Of course, we want to get the best possible return for that investment. That is understandable since buying a home and paying the monthly mortgage is costly. However, selling a home will also require you to consider cost involved in selling it.
But you need to keep in mind that few big costs of home selling will surely dent your profit. If you're selling a home for the first time, here's an overview of the different costs of selling a home.
Repairs
Your home needs to be as appealing as possible to attract buyers. So, you need to make sure everything is fine in your home. Necessary repairs should be done to ensure that the house looks attractive to buyers. It will also potentially raise your home's value.
Repair costs will vary by home, but your goal is to enhance the appeal of your home. It may require minor cosmetic works such as decluttering, painting the walls, fixing a leaky faucet, repairing staircase, or major upgrades.
Be prepared when deciding to sell your home because major repairs can set you back financially.
Home staging
During home visits, prospective buyers usually visualize themselves living in the house. So as a seller, you want them to focus on the best feature of your home. This is where staging comes in. It involves arranging décor and furniture so your home will be appealing to buyers.
Staging services are pretty expensive. It ranges from $2,300 to $3,000. If you want to save, you can do the staging on your own. However, you need to know all the things you need to purchase.
It may include light fixtures, new furniture, decorative accessories, curtains, and paint. You may also need to rent a deep cleaner for your carpets or pay professional carpet cleaning instead.
Home upgrades
Small, attention-grabbing home improvements can provide the best return on your upgrade investments. It can be new cabinet hardware or fresh paint. If you prefer major upgrades such as kitchen overhaul to impress buyers and to sell your home faster, you can do so.
However, it will probably cost you thousands of dollars that you won't be able to recover when selling your home. You can ask your agent for ideas on minor home improvement that will help sell your home faster.
Real estate agent commissions
If you're working with an agent, they will be the ones to handle the selling legwork on your behalf. It involves arranging things like home photography, updating listings, arranging tours, and scheduling paperwork. It saves you time and energy, but it comes with a price.
On average, real estate commissions range from 5% to 6% of the home's sale price. This means, if you sell your home for $300,000, you will pay your agent %15,000 t0 $18,000.
Seller concessions
A concession means you agreed to pay the buyer for a particular cost to sweeten the deal. For instance, the buyer may ask you to help them with the processing fees, inspection fees, and other expenses. Usually, buyers ask for concessions if they are short of cash to cover the closing costs, or if the property is old and they are saving money for home updates.
Closing costs
Closing costs are separate from the agent's commission. It's an assortment of fees paid by both sellers and buyers at the closing process of the real estate transaction. On average, sellers typically spend about 1% to 3% of the sale price at closing. For example, if you want to sell your home for $250,000, the closing costs may range from $2,500 to $7,500.
Other home selling costs are mortgage prepayment fees, tax implications, utilities, home transition, and overlap costs, and may include a one-year home warranty. Remember that most home selling costs depend on the price you want to sell your property and its worth.
All the costs can add up, but don't let them surprise you or your budget. It's best to be prepared with all the costs before you decide to list your home.
Read next: Everything You Need to Know About Rent-to-Own Homes
