Breaking Down the True Cost of Selling Your Home

Selling your home can be really lucrative at the right time, yet many sellers are surprised by all the costs that can eat into their profits. Understanding these expenses is crucial for any homeowner looking to efficiently sell their home. Today, we’ll break down the essential costs associated with selling a home and offer insights on how to manage these expenses.

Preparing Your Home for Sale

Staging and Curb Appeal: First impressions matter. Investing in staging your home and enhancing curb appeal can significantly impact buyer interest. While professional staging has its costs, simple DIY improvements can also make a substantial difference.

• Average Staging Costs: Professional staging may vary based on your home’s size and the extent of services required.
• Landscaping: A well-manicured lawn and tidy exterior can boost your home’s appeal. Costs can range from minor touch-ups to more extensive landscaping projects.

Real Estate Agent Commission

The expertise of a real estate agent can be invaluable, but it comes at a price. Commission fees, typically range from 5% to 6% of the sale price, and they’re split between the listing and buyer’s agents. While this fee covers the comprehensive services provided by your agent, it’s one of the most significant costs sellers face.

Seller Concessions and Closing Costs

Seller Concessions: To make a deal more appealing to buyers, sellers may offer concessions, such as covering certain closing costs or helping to buy a rate down, which can amount up to 1.5% to 2% of the sale price.

Closing Costs: Sellers also incur their own closing costs, including various fees and taxes, which can total 1% to 3% of the sale price.

Mortgage Payoff and Capital Gains Tax

Mortgage Payoff: Selling your home means paying off your existing mortgage, which might include a prepayment penalty or additional interest.

Capital Gains Tax: Profit from your home sale may be subject to capital gains tax, though many sellers qualify for exemptions that can significantly reduce or eliminate this cost.

Home Repairs and Moving Costs

Home Repairs: Addressing repair issues identified during the home inspection is often necessary to proceed with the sale. Costs can vary widely based on the nature and extent of repairs.

Moving Costs: Don’t forget to account for the expenses of moving to your new home, whether you’re hiring professional movers or doing it yourself.

Navigating the Financial Landscape of Selling Your Home

Selling a house involves complex costs, from agent commissions to moving expenses. By understanding these costs upfront, sellers can better plan their budgets, set realistic expectations for their net proceeds, and make informed decisions throughout the selling process. If you need help understanding if selling your home and buying a new one would be a wise choice, give one of our helpful mortgage professionals a call today.