The Cost of Selling a House.
If you’re selling a home, you’ll want to know how much it’s going to cost you to close the deal. That way you can make a plan for buying your next house.
In addition to what’s needed to pay off your mortgage, it’s smart to plan to spend about 10% of the home price in selling costs. But some things are optional.
Common costs when selling your home
Real estate brokerage fees: The seller’s agent usually charges 6% to 7% of the home purchase price when the deal closes. This is likely the biggest expense you’ll pay. Seller’s agents usually split commissions with buyer’s agents, who generally don’t charge their clients. Commission fees are negotiable, however. Whichever seller’s agent you choose, make sure you agree on commission terms in writing.
Taxes and neighborhood fees: You’ll owe a prorated share of property taxes when you sell your home. The amount could be close to zero if you’ve recently paid taxes, or several thousand dollars if the due date is near. You will also be charged a local transfer tax, which the seller pays in order to change the title from one person to another. If your neighborhood has a homeowners association, expect to pay prorated membership fees. You or the buyer may also need to pay an HOA transfer fee.
Title insurance for the buyer: This protects the buyer in case there’s an issue with the home’s ownership history. Buyers also purchase a title policy if they apply for a mortgage, but that policy only protects the lender. Traditionally, the seller buys a separate policy for the new homeowner. The title company will run a title search on the property during the sale process. If a lien on your home is revealed, you’ll also need to settle it before you can sell the house.
Your current mortgage: It’s no surprise you’ll need to pay off your mortgage when you sell your home. But the payoff amount is probably different from the balance due listed on your last mortgage statement, because of interest charges. You’ll want to know the payoff amount. If your mortgage has a prepayment penalty, that will be added to the amount due.
Home repairs: Your buyer will probably order a home inspection before closing. If the report reveals problems, you may be asked to pay for repairs.
Moving costs: Whether you buy boxes, pack and move them yourself or hire a company, you’ll want to budget money for the actual move.
Optional costs - At times it can be smart to pay for extra services to attract potential buyers. They’re not always necessary, but in a sluggish market they could help your home stand out.
Home warranty: To ease potential worries about buying an older home, sellers can offer a home warranty that covers most of the repair costs if a major system breaks soon after the home is sold. A typical one-year home warranty costs $350 to $500.
Home staging: It’s wise to remove clutter and give your home a good cleaning before you put it on the market. You may wish to go a step further and hire a home stager to make your home more visually appealing. Stagers may rearrange furniture, change the interior design and even rent furniture to display while selling your house. Costs are from $250 to $1,000.
Portion of buyer’s closing costs: Buyers are usually responsible for their own mortgage fees, home inspections and appraisal expenses, which can add up to about 2% to 5% of the selling price. If it’s a slow or buyer’s market, offering to pay some of those closing costs for the home buyer could help close the deal