There’s little better in life than selling your home, and realizing a big profit off it. But that profit may not be as big as it looks. While most people understand they will be paying a real estate commission if they use an agent, there are other expenses that homeowners often forget to factor into the selling costs.
Buyer’s Agent Commission
It’s common for the seller to pay for the commission paid to the buyer’s agent, which is usually about 2.5 – 3 percent. Many homeowners, especially those selling their home on their own without a real estate agent, forget about this expense. It can be worth it, however, especially if the buyer’s agent will take care of all closing paperwork for the seller.
Closing Costs
Most homeowners understand there are closing costs involved with selling their home, but many don’t understand just how big that bill can be. Depending on the jurisdiction, seller’s closing costs can include real estate transfer taxes, recording or deed fees, title insurance fees, and prorated taxes, homeowner’s association dues or even a mold remediation from a company like The Mould Doctor. In some states, such as Florida, what each party is expected to pay can vary by county. A myfloridabesthomes.com realtor can guide you in that case. In Mass., your agent will be there to help you understand what you will be expected to pay.
Repair and Upgrade Costs
Whether they do it proactively or after inspections, homeowners usually have to spend some money on repairs and upgrades to sell their house. No house is perfect, and there will be some things that need attention before a sale can take place. Common cosmetic expenses include painting, filling in cracks, replacing broken windows and flooring, and trimming trees and shrubs. Inspections can turn up more major problems that need attention. If an inspection finds termites or high levels of radon gas, it’s usually the seller’s responsibility to either pay to mitigate the problem, or provide the buyer with a credit to cover the cost. The same goes for any plumbing, electrical, or structural problems that are found.
Liens
A lien is essentially a debt that’s recorded against your property. Your mortgage is a lien, for example. All liens must be paid off at time of sale. Most people understand that includes their mortgage, but they may forget about other liens. If you have taken out a second mortgage or home equity line of credit, they must be paid off. The same goes for any construction or tax liens.
Selling your home is not cheap, and you need to be prepared for the costs you will face. Don’t forget about these commonly forgotten ones! Your agent is here to help you understand all the additional costs that are associated with both the buying and selling sides of your transaction.