Imagine a buyer walks into your home and immediately offers you the asking price. It’s a win! Or is it? Have you thought about all those home selling fees that are about to appear at the end of that calculation?
To avoid that scenario when planning a move, it’s worth understanding the typical costs involved in a real estate deal.
In this guide, we’ll explain the likely fees for selling a home and whether you or the buyer will cover them. We’ll also share some useful tips on how to reduce or manage those costs.
Real Estate Agent Commissions
If you hire a real estate agent to sell your home, expect fees to figure as part of your home selling costs. This will generally be on a commission basis.
Though you can shop around for cheaper deals, most agents work for 5-6% of the property sale price. And that’s generally split between the seller’s and buyer’s agents.
That fee covers the marketing and promotion they do to help sell your property and negotiate the sale on your behalf. For example, they will list your property online with other houses for sale.
Home Staging and Repair Costs
You may have a recently renovated showhome style house. If so, a sale will be relatively easy. But for most homeowners, house selling requires some work.
That often means making improvements to the house to repair visible problems.
It could include renovations too, like replacing a tired old kitchen with a new one. Or it could mean staging an unoccupied house to turn it into the buyer’s dream property.
In any of these scenarios, you’ll incur costs to get the house in excellent condition, ready for sale.
The closing costs refer to the fees you pay after a sale once the real estate transaction has been finalized. It often includes escrow fees which cover the handling of funds. It may also include title search fees and legal fees.
These are most often the buyer’s responsibility, but a seller might offer to pay some of it to help close the sale.
Taxes and Other Government Costs
The state and local governments will impose transfer taxes during a property sale. The figure depends on where you live, but it’s usually a percentage of the sale. Sellers may also opt for fees to cover the official record outlining the change of ownership.
Home Inspection and Appraisal Fees
Buyers will pay home inspections and appraisal fees, although the seller may cover these costs as part of the deal.
Inspections are there to help identify potential issues, such as urgent repairs. Appraisals provide an independent market valuation which is useful when applying for a mortgage.
Strategies to Help Lower Your Costs
If you want to lower your final costs, one easy option is to use a cash buyer. It’s an effective way to sell your home fast.
Cash transactions will help you skip steps in the sales process, saving time and money. Plus, you won’t need to wait for things like mortgage approvals.
Fees for Selling a Home: Why It Pays to Be Savvy
Don’t get caught off guard by high fees for selling a home.
You must know what costs might come up and have a precise figure from third parties about their fees. Doing so will save you from unwelcome surprises later in your real estate sale.
Ready for the next step? Ensure your house is in the best condition for sale by visiting our home and garden section to learn our top tips.