So, you plan on selling your home. We’ve got good and not-so-good news for you. The good news is, if you do your research and get things right, you’re in for a windfall of profits from the sale. The not-so-good news is that there are costs involved in selling a home. These costs can slash as much as 10% of your sales. However, you can find ways to reduce these costs if you plan ahead. Here are 9 common costs to prepare for when selling a home:
- Closing costs
These costs come in when you finalize the sale of your property with a buyer. For sellers, these can run up to 8% to 10% of the sale price of the home. The amount you pay will depend on various factors like local tax laws and title fees. These costs consist of the following:
- Real estate agent’s commission
- Prorated property taxes
- HOA fees
- Credits toward closing costs
- Lawyer’s fees
Real estate agents can market your home, host open houses, and handle tough negotiations for you to get the best deal. Hiring one is a no-brainer if you want to sell fast, but you have to be ready for the fees. The typical commission averages between 5% and 6% of the sales price. You may be able to negotiate for a lower price but there could be compromises on the extent of their work.
Imposed by the state, county, and municipal levels, transfer taxes are what you pay when your title changes ownership from you to the new homeowner during closing. In some states, the transfer tax is also considered an excise tax. For Washington, the state excise tax rate is 1.28%. This rate is added to a locally-imposed tax. If you sell your home in Tacoma, where the local tax rate is 0.50%, the total will be 1.78%.
There are legalities involved in selling real estate, especially for cases involving distressed properties or real estate holdings. Real estate attorneys help you avoid these hurdles so you can sell your home without any legal worries.
Some areas where lawyers come in include:
- Spotting problematic terms in contracts;
- Standing up for your rights regarding easements and boundaries; and
- Negotiating better terms for your contract.
Required in most states, title insurance is a document that protects buyers and lenders from losses if legal problems occur. These include forgeries, problems with documents, and ownership disputes.
Buyers usually pay for the lender’s title insurance policy, which protects the latter up to the amount that they loaned. In some states like Washington, the seller customarily covers the buyer’s title insurance policy. These insurance policies can range from a few hundred dollars to more than $2,000.
With staged homes selling 88% faster and for 20% more than non-staged homes, there’s no denying the value of home staging. While you can save money by staging your home yourself, hiring a home stager is well worth the cost as they can give your home an edge over the competition. They can boost your curb appeal, highlight each room, and give it a less personal and more neutral look.
Professional home stagers usually charge around $500 to $5,000. They base it on the size of your home, the number of rooms, and your home’s value.
If you choose to stay in your home while selling it, you’ll have to pay for your usual utilities like water and electricity. But if you decide to stay somewhere else, buyers will want to make sure every faucet and light switch works. Also, you’ll have to keep your lights on during open houses.
Before putting your home up for sale, hire a professional home inspector to spot problems it may have. They will give it an inspection from top to bottom and let you know of anything from structural issues to pest infestations. It’s best to know about these early on so you can work on them then sell your home as soon as you can.
Nobody will want to buy a broken-down home so make the necessary repairs before you put your home in listings. These include fixing leaking pipes, faulty wiring, and cracks in the walls. While these repairs may cost a lot depending on what needs fixing, having them done increases your chances of negotiating for a higher selling price.
Selling your home in Tacoma, WA? Work with an experienced Tacoma realtor like me, Lori Lewandowski, and you’ll be getting offers in no time. Give me a call today at 253.617.5922 or send me an email at lorilewandowski(at)gmail(dotted)com. You can also leave me a message here.