One of the most important things before you sell your home is knowing the cost of selling. We’re talking about the moolah, green backs, the bottom line, how much you’ll make…. or worse-lose!
When my husband and I were first discussing putting our home on the market, we had no clue as to what our financial responsibility would be. Getting the numbers upfront is a smart, realistic approach to selling your home and knowing what is expected at closing. What are the costs of selling my home? Real estate agent commission is not the only cost. Here is what real estate expert Renee Burrows says about Understanding Your Net.
“Many home sellers get “hung up” on what the commission is on selling their home. Sometimes they don’t understand that there are a myriad of other costs of selling a home involved (besides liens) that are usually equivalent to the commission amounts. Each scenario for a home sale is different and your mileage may vary. Here are the typical costs for selling your home:
Real Estate Agent Commission: This is not a “set rate” as some people may think and it is negotiable. When you are interviewing real estate agents it is common in our area to ALSO charge a transaction fee or a flat fee amount on top of your negotiated %.
Real Property Transfer Tax or RPTT
Title & Escrow Fees: Again, this is not a set rate, settlement costs & title insurance fees vary from title company to title company.
Reconveyance Fee: This is for paying off your mortgage if you have one and it runs around $300.
Miscellaneous & Pad: For Fed Ex, Notary & Miscellaneous Items – $500
HOA Transfer Fees & Documents: Some areas (with governed by multiple HOAs) can expect these fees to run upwards to $1000.
Costs of Repairs: If costs for repairs are written into the executed contract, this amount should be considered for the net also. Typical costs for repairs are $500-1000. Even if no costs are requested, sometimes lenders on financed transactions may ask for repairs on certain items to be done.
Costs Pursuant to Buyer’s Loan Program: There are also some loan programs that will not allow buyers to pay certain costs (such as VA loans) and the seller will have to bear those costs. Expect that to run around 1/2 to 1% of the purchase price.
Buyer’s Closing Costs: The buyer may ask the seller to pay their closing costs for items such as home warranty, appraisal, lender costs, title costs, recurring costs, prorated costs, etc. This fee is typically 3% but can run as high as 6%. This is all negotiable with the buyer contract before it is executed.”
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When we started interviewing agents, which I discussed in my last post and highly recommend, no other realor gave me an exact breakdown of what the estimated closing costs would be, until we met Renee. She prepared for us a detailed net sheet which broke down the sale of our house into 4 different price points, the average time to sell at each price, and what was expected of us at closing. It was an eye opener for sure and helped us mentally get prepared for closing depending on the offer price.
Prepping your home is not enough! If you aren’t prepared financially for what may be expected at closing, you may be losing money.
Click the button below to go to the next Sell Your Home Series post.
We talk about Curb Appeal and the importance of drawing the buyer in from the moment they see your property. Be sure not to miss it!