When you sell your home, you need to put it on the market, so you can get the maximum exposure possible. The more people that are aware your home is for sale, the better the odds that you’ll sell quickly. To get this exposure, you need a real estate agent who does the marketing for you. And that agent is going to suggest things such as home improvements to help increase the value, staging the home so it’s appealing to a broad demographic of potential buyers, and the closing costs that come into play once the sale contract closes. So, just how much does it cost you to sell your home? It depends.
💰 Real Estate Agent’s Commission
A real estate agent doesn’t get paid up front or by the hour for marketing your home to find a buyer. Instead, the agent receives a commission when the home sale closes. How much the agent receives depends on what was negotiated prior to the marketing of the home and varies with the final sale amount of the home.
Many home sellers think they’ll save money on the commission by doing what is known as For Sale by Owner (FSBO), but they lose access to listing their home on the MLA and the marketing skills of a realtor. A real estate agent does a lot of work on behalf of the seller, work that someone doing a FSBO has to do on their own and may not be as well equipped to handle.
🏠 Home Improvements and Repairs
Homes tend to need repair as they age and what was popular when you bought the home may no longer be in fashion. Repairing the home is important if you want to receive high dollar offers for your property. Putting the money into fixing the home prior to sale has potential for a return that’s higher than the amount you put in. And you avoid the risk of the appraiser marking the home down as not being worth the offer because the repairs weren’t done.
Did you move into your house 30 or 40 years ago and find that you never really needed to update it because you were happy with it? You’re going to find that buyers aren’t going to be as satisfied with the interiors as you are. Buyers want fresh, modern, and new interiors so they don’t have to deal with the extra effort and money needed to update a home. If you want someone to pay close to or at your asking price, you need to update those old interiors. This is where a real estate agent is helpful. They can determine what should be done and what can be left alone in order to maximize the selling price.
🏡 Staging Your House
Your home is comfortable to you, but again, it may not feel that way to a potential buyer. The house needs to be in a neutral state to allow a potential buyer the opportunity to feel out the home for their own purposes. In other words, a buyer needs to be able to overlay their lifestyle onto the home and decide if it’s a good fit for them. Staging your home puts the house into a state that lets a potential buyer do just this.
Staging involves taking out personal touches like pictures, decor, and knick-knacks. If you’ve painted walls an unusual color, you want to repaint them with a neutral color to create a blank canvas for a buyer. Furniture is also moved out of the way or taken out of the room entirely so people can walk around and see the space without objects in the way.
All of this is done with the help of the real estate agent or a professional stager who prepares the home for you and gets it ready for people to view.
📝 Closing Costs and Other Fees
Closing costs are typically paid by the buyer, but if the housing market is in favor of the buyer, you may be asked to help pay the costs to close the sale. Other costs can include a transfer taxes, title insurance in case the title investigation wasn’t thorough, attorney fees for preparing the contract and performing due diligence of the sale, homeowner association fees, and municipal bills that weren’t paid prior to closing.
It’s not always possible to have an exact dollar amount on the fees because each home sale is unique. You won’t know how much you have to take out of the final sale price until after the work is done, the sale finalized, and everyone paid for their services. However, a real estate agent can provide you with an estimate of costs along the way, so you don’t get a surprise.