Additional Coverage:
- 13 Costs That Almost Always Surprise People When They Sell Their House (financebuzz.com)
Selling Your Home? Don’t Get Blindsided by These Hidden Costs!
Thinking about putting your house on the market? You might imagine a straightforward process: list it, sell it, and collect your cash.
But hold on a minute! Many homeowners are surprised to find that selling a property can involve thousands of dollars in unexpected expenses.
Being proactive about these “hidden costs” can significantly impact your bottom line. By anticipating them, you can price your home more effectively and potentially save a hefty chunk of change by strategizing the most budget-friendly ways to manage these expenses.
Here’s a breakdown of some of the less obvious costs you should be aware of when it’s time to sell:
1. Home Staging Costs
Making your home look its absolute best for potential buyers is crucial. Professional home staging often involves decluttering, removing personal items, and arranging furniture to help buyers envision themselves in the space.
While you could tackle this yourself if you have the right eye and furnishings, professional staging typically runs between $750 and $2,800. It’s an art form, and getting it right can truly make a difference.
2. Title Insurance Fees
Title insurance provides protection against claims on the property’s ownership. It’s common practice for the seller to cover the buyer’s title insurance cost, offering peace of mind should any title-related issues arise.
3. Loan Payoff Fees
When you sell, your existing mortgage must be paid off in full. While the sale price usually covers the bulk of this, be aware of potential prorated mortgage interest.
Some lenders also impose a prepayment penalty if you pay off your mortgage within a certain timeframe after purchasing the home. It’s wise to check with your lender beforehand, as these penalties can be substantial.
4. Property Taxes
Property taxes can be a sneaky expense. Many states collect these in arrears, meaning you pay for time that has already passed.
If you’ve paid taxes for the first half of the year in January but sell in March, you might owe taxes for those three months of the current year. Essentially, you’ll be responsible for the taxes corresponding to the period you owned the home.
5. Real Estate Commission
This one might not be entirely “hidden,” but the sheer amount can be a shocker. Real estate commissions typically range from 5% to 6% of the home’s sale price.
For a $300,000 home, that’s up to an $18,000 payment to your agent. While negotiation is sometimes possible, it can be a challenging conversation.
6. Home Cleaning and Prep
Before your home hits the market, a good scrub-down and some minor touch-ups are usually in order. This can include professional carpet cleaning, power washing the exterior, landscaping, tree trimming, and even a fresh coat of paint.
Even if you DIY, you’ll still incur costs for materials and supplies. The hope, of course, is that these investments translate into a higher sale price.
7. Professional Photos
In today’s digital age, high-quality listing photos are paramount. They are your home’s first impression and a critical marketing tool. Investing in professional photography, typically costing $500 to $1,000 depending on size and location, is often well worth it to attract more in-person viewings.
8. Utilities
You’re responsible for utility costs until the day the property officially transfers to the new owners. This can include keeping the heat or air conditioning running even after you’ve moved out, as well as water, sewer, and electricity for those final days.
9. Capital Gains Tax
This tax is levied on the profit you make from selling your home – the difference between your purchase price and sale price, minus any documented improvements. Numerous exemptions can significantly reduce what you owe, so consulting a tax professional before selling is highly recommended.
10. HOA Fees
If your home is part of a homeowner’s association, you may owe a prorated portion of their monthly fees for the month you’re moving out. These dues contribute to the maintenance of common areas and amenities.
11. Attorney Fees
Attorneys often draft sales contracts and other legal documents related to the transaction. While sometimes bundled into real estate agent fees, you might incur separate attorney costs, particularly if you’re not using an agent. These can range from $100 to $200.
12. Radon Gas Testing
In some cases, sellers may be asked to conduct a radon gas test to ensure the home is properly ventilated and free of this harmful gas. At-home kits can cost up to $250, while professional testing can range from $150 to $800.
13. Additional Seller Concessions
During negotiations, you might agree to “seller concessions,” which are additional costs you absorb to finalize the deal. This could involve contributing to the buyer’s closing costs or agreeing to cover certain repairs or upgrades. For instance, instead of fixing a broken sewer pipe yourself, you might reduce the home’s price to allow the buyer to handle the repair later.
The Bottom Line
Selling your home involves more than just a listing price. Factor in these various expenses, including potential moving costs, temporary storage, or even new furniture for your next place. Being prepared for these financial realities can significantly reduce stress and ensure a smoother, more financially sound transition.
Read More About This Story:
- 13 Costs That Almost Always Surprise People When They Sell Their House (financebuzz.com)