The median home price in the U.S. hit an all-time high in June, reaching $295,300. With high prices and a shortage of inventory, you may be tempted to put your home on the market. But selling your property could cost you thousands of dollars.
Some of the major costs of selling a home include:
Home Repairs
Unless you’re selling a new home, there’s a good chance that you’ll need to make at least a few repairs before closing the deal. It could be something as simple as changing fixtures and adding a fresh coat of paint, or it could be something more complicated, like renovating your kitchen.
If the home inspector finds problems, like a leaky roof or a faulty sewer line, you’ll need to pay for these repairs as well.
Major repairs can easily cost you thousands of dollars, so be prepared for these expenses if you suspect that your home may have trouble passing an inspection.
Closing Costs
Closing costs are typically the responsibility of the buyer, but if you’re in a buyer’s market – where there are lots of homes for sale – you may be asked to cover these costs.
Closing costs can range anywhere from 2-5% of the sale price.
At least some of these fees are negotiable, and it’s highly unlikely that you’ll be responsible for all closing costs.
Mortgage and Utilities
If you move out before the home is sold, you’ll still need to pay the monthly mortgage and most of the utility bills, including water and electricity, until the home is sold.
Review your current bills to get an idea of how much you’ll need to pay each month to leave on the utilities and continue the mortgage until you find a buyer.
Realtor Commission
Realtor commission is typically the biggest cost to sellers. Expect to pay 5-6% of the sale price in commission.
If you sell your home for $270,000 – a little less than the national median price – you may pay up to $22,200 in commission fees. That fee is split between the buyer’s agent and your agent.
Home Staging
Demand is high in the current real estate market, but that doesn’t necessarily mean that you’ll have an easy time selling your home.
According to the National Association of Realtors, 49% of buyer’s agents say staging has an effect on buyers and 32% of the time, results in a 1-5% increase in offer price.
The median cost of home staging is $675.
Selling a home will cost you money – sometimes thousands of dollars. Understanding these expenses before listing your property will prevent sticker shock at closing and help you prepare for the road ahead.
