You want to embark on a new adventure and wonder how much it will cost to sell your house.
Before it hits them in the face at the closing table, some sellers might not be aware of the amount of money they potentially invest in their house sale.
That won’t be you, though!
Make a budget to account for the costs associated with selling your house to achieve your financial goals and crush them.
So that you may prepare for the rough waters of real estate, we’ll show you the typical expenditures associated with selling a home.
What’s the Cost of Selling A House?
Agent commissions, home upgrades, closing costs, and moving expenses contribute to the average cost of selling a home, which comes to 15% of the sale price.
Therefore, if you sell a house for $250,000, you might have to pay about $37,000 in selling costs.
That can seem excessive. But remember that each seller will incur a different expense when selling a home.
Depending on your circumstances, you might be able to forego some selling costs.
Here’s what a home-selling budget might look like:
- Agent commissions: $15,000
- Major repairs: $11,2502
- Closing costs: $7,500
- Home staging: $1,1004
- Moving costs: $1,1005
- Home inspection: $3506
- Total selling costs: $36,300
These figures represent what a seller would receive when selling a $250,000 house.
Let’s break down each area to better understand how much these budget items will cost in your circumstance.
Real Estate Agent Commissions
Okay, so the commission fee—a portion of your earnings that goes to the real estate agents who assisted you in closing the deal—will probably be one of your significant expenses when you sell a home.
The typical commission is 6 percent of the sale price of your home, split between the seller’s agent and the buyer’s agent (maybe 3 percent each).
Therefore, if you sell a $250,000 home, $15,000 (or $7,500 each) will go to the real estate agents.
Is Hiring An Agent Worth the Money?
Yes! This is why: Real estate experts who communicate the right expectations help you feel assured throughout the selling process.
They offer advice on getting your house ready for potential buyers and a tried-and-true marketing strategy to help you sell your home quickly.
Major Repairs
Costs for major home repairs range from $4,000 to $18,500.
This includes any necessary repairs found during your home inspection.
You probably don’t need to worry about this if your home is brand-new.
However, if the Pilgrims built your home, it might need repairs.
Before selling their homes last year, 73% of sellers made at least one improvement.
A typical home improvement project consists of three tasks:
- Landscaping the yard
- Updating the bathrooms and kitchens
- Replacing carpet or flooring
- Painting the exterior
- Redecorating
Home Staging
Costs for home staging range from $450 to $1,800.
Staging’s goal is to make your home a hospitable, inviting space that buyers will want to call home, resulting in more money and a quicker sale for you.
Employing a staging company, ordering cleaning services, renting furniture, installing better lighting, modernizing cabinets, and painting include some of the costs associated with staging.
Remember that as part of their marketing services, your real estate agent might pay some or all of these expenses.
Closing Costs
According to Realtor.com, closing expenses are usually paid by the seller in the range of 1-3 percent of the home’s sale price.
Closure costs are payments for services that aid in the formal closing of a real estate transaction.
Selling closing costs typically include paying for an attorney, a title insurance provider, a transfer of titles, and taxes.
Sellers occasionally offer to sweeten the sale by paying a portion of the buyer’s closing costs.
An example of a seller concession is this. Twenty percent of seller concessions last year included a promise to cover part or all of the closing fees for the buyer.
Moving Costs
Moving out of your home can cost between $600 and $1,700.
You guessed it, renting a moving vehicle or working with a moving company are two options for managing moving expenses.
Remaining Mortgage Balance
The outstanding loan debt, which the sale proceeds should reimburse, is another closing cost you’ll incur if you have a mortgage on your house.
Let’s imagine, for illustration purposes, that after paying off your ten-year mortgage, you still owe $80,000.
Now imagine that you receive $250,000 for your house.
From the proceeds of the transaction, you deduct $37,000 for selling costs and $80,000 for the mortgage.
You’re left with $133,000, a nice down payment for your following property.
It’s generally not a good idea to sell your home right now if you’re underwater on your mortgage for any reason, which means the loan balance exceeds the value of your home right now.
If you did sell, you would have to cover all the selling expenses and wouldn’t make enough money to pay off your mortgage.
If you’re underwater, hold on and keep making your mortgage payments.
Let the value of your house increase until you can sell it for enough money to completely cover the debt.