It is important to understand the typical costs when selling your home.  Many real estate professionals will be happy to give you a Market Analysis on your home to establish value.  If you ask, they will also give you an estimate called a Seller’s Net Proceeds sheet showing the costs and how much you may net after the sale.

Like every smart home seller, you will want to know how much money you can expect to walk away with after closing.  Understanding more about the costs to sell your home can help you better calculate your likely proceeds.

Set Your Expectations

Today’s hot real estate market gives the advantage to the “seller”, which includes more power at the bargaining table.  As a good rule of thumb you should expect approximately 10% of the sales price in costs, like listing/buyer agent commissions, state sales tax (excise tax in Washington State), closing agent (escrow), title insurance, filing fees, property taxes, etc.

Once you have interviewed and selected a real estate agent, be sure you also take advantage of their expertise on price and the costs involved in selling your home.  If your agent is a pro, they will help you understand the numbers, expectations and assist you in getting through this big step in your life.

Having an estimate of your costs when selling your home can help you set good expectations about the likely net proceeds ($) from your home sale.

Listing & Buyer Agent Commission

The first cost to expect if you sell your home is the payment to your agent (Listing Agent) in the form of a commission for the work they do. Your agent’s work includes marketing your home, scheduling professional pictures, staging, listing your home on the multiple listings service (MLS) and social media platforms, fielding calls, reviewing offers with you, negotiating with buyers, scheduling inspections, inspection negotiation, appraiser, managing the transaction, and many other tasks.

The Listing and Buyer agent’s commission our house is split between them and typically runs between 5-6% as an industry standard.

Home Staging Costs

We all feel that are decoration skills are above average, but it may not help you sell your home. Your agent may make suggestions on how to stage your home using furniture that is not your own. Why? Because “on average, staged homes sell 88% faster and for 20% more than non-staged homes,” according to Realtor.com.

Staging can be costly, and you need to see if the cost will make good economic sense.  Analyze the total cost of staging; the cost to store your own furniture/decorations; how quick your home might sell; and if it will help sell your home for a higher price.

Your agent can help you with the numbers and help you determine whether staging will be cost-positive for you.

Home Inspection Cost

A home inspection has a cost of $350-$500 depending on the size of your home.  The buyer typically will do an inspection on your home, but more sellers are doing a pre-listing inspection.  This will help you in many ways:  1) You can identify and fix any repairs prior to listing your home.  2) You can provide the home inspection to potential buyers and the repairs that you have done.  Buyers will feel more comfortable purchasing your home.  3) This may lead to buyers waiving their inspection contingency, reduce or eliminate inspection negotiations and speed up the closing.

As a seller, you can be prepared ahead of time and perhaps avoid any costly surprise repairs you may have to make and avoid buyers from cancelling the transaction due to inspection items discovered.

Home Repairs

If you have a pre-inspection this may not be an issue since you would have corrected most of the items found in the report.  If the buyer does the inspection, they will come back to your agent asking to fix certain problems or compensate the buyer for not correcting the issues.

Inspections are all about the condition of the home and the appraisal is all about the market value.  The appraiser does look for health and safety issues, like; unpermitted and/or building code violations, CO2 detectors not installed, hot water tank that is not double strapped, plumbing or roofing leaks, missing electrical plate covers and handrails on the stairs.

Most home repairs are negotiable, and your agent will help you with the details. In a seller’s market, you also may have more negotiating power on paying for repairs.

Transition Costs

Transition costs are often overlooked, but they are real costs.  Most home sellers are also buying their next home. If that’s you, it’s a good idea to estimate the cost to rent back your current home from the buyer until your new home loan can close. How about the cost of moving company or renting a storage unit?  Have your agent help you walk through the timeline and possible options for you.

Mortgage Payoff

You will pay off your mortgage when you sell your home.  There may be a credit or debit for property taxes and utilities as well. Know how much you owe!

Closing Costs

You can expect to spend an additional 1-2% of your home’s price on these expenses.  These seller closing costs include closing agent fees, title insurance, property, or deed transfer taxes, recording fees, and outstanding liens on the property.

There are many factors to consider when you sell your home, so being prepared will help you save money, save time and potentially sell your home for more than you expected.

Contact us if you have questions or need to be connected to a real estate or mortgage professional to get the numbers before you list your home!