How Much Does it Cost to Sell a Home?
BY KAPINA LANSDALE
Several costs can incur when selling real estate, and they can quickly add up to as much as 10% of the sale price overall.
Included in the Purchase Contract, the buyer’s agent will have any cost that they want the seller to pay. But, the seller should clarify with their agent of any fees that are customary and those that are not. You won’t have to pay for a new buyer’s insurance, title registration, or taxes when selling a car, but selling a home can be quite different.
As a seller, it’s great to educate yourself now for the upcoming cost.
most, purchasing a home is a once in a lifetime investment and not something you would want to go into blindly.
Contributing Factors
The cost it takes to sell a house can vary depending on local customs, and the current real estate market. Things to consider such as, is it a buyer’s market, a seller’s market, or a fairly balanced market?
Costs of the sale in the purchase contract are negotiable, but keep in mind there is a possibility it may turn a buyer away if most sellers are willing to pay for certain items while you are opposed to it.
Other factors may be personal and unique depending on the situation, such as the condition of the home or how quick you want to sell.
“As a Real Estate Professional, I strive to not only guide you through, but also educate you during this transaction.“
Preparing the Home
Very common your agent would stick a for-sale sign in your lawn and you’re open for business. But you don’t want to be in the business of selling your home– you want it sold, and this can require a cash investment.
Taking care of minor repairs and cosmetic issues before you list. You may even want to address issues that you suspect may arise during the home inspection such as plumbing or roofing issues.
Depending on your situation you may end up having to pay for any home inspection repairs anyway, whether it’s re-negotiating the price, fixing the issue prior to closing or offering a credit to the buyer. Addressing these issues ahead of time can create a smoother path throughout the transaction.
Let’s not forget “Staging” your home so it looks the most inviting for showings. This is something to consider if the home is vacant and unfurnished. Staging your home can help a potential buyer invision themselves in the home.
Real Estate Commissions
Real estate commission can be anywhere from 5% to 6% of the sale price, although 6% is more common. Half of the commission typically goes to the seller’s agent and the other half to the buyer’s agent.
This is where some homeowners will try to scrimp and consider selling the property themselves, but that may cost you more money in the end. The National Association of Realtors routinely conducts surveys that show seller’s earn about 20% more by hiring an agent versus selling a home by owner (FSBO).
Using an agent can help expose your property and to reach more potential buyers using their connections and Multiple Listing Service (MLS). Agents are sometimes willing to negotiate their commissions, such as when the market is strong or the sales price is significant.
Other Customary Fees
In Hawaii it’s a customary practice for sellers to pay for 60% and buyers to pay 40% of the buyer’s selected title insurance. That includes additional cost for extended policy coverage.
For more information on Closing Costs check out my post on What are the Seller’s Closing Cost?
Bearing of Markets on Costs
You might be able to negotiate that a buyer picks up more of the closing costs in a seller’s market simply because you have multiple offers on your home. Buyers in a seller’s market who offer to pay more of the seller’s costs can appeal as a more attractive offer. While the opposite is true in a buyer’s market. A seller may need to offer to pay some of the buyer’s closing costs to make the home more attractive.
Interested in Learning More?
For more information on selling your home, please Contact me. Let’s get you ready! Want more helpful tips and island information, Join my Newsletter and be the first to get notified on new updates.