If you are considering selling your home, it is vital that you are knowledgeable about the fees associated with selling. Many homeowners each year go to list their home, then are surprised that at the end of the day they are paying sometimes over 10% of the selling price in fees. We have therefore decided to compile a list of the most common fees homeowners incur when they sell their home. Let’s take a look!
Phase 1: Hiring a Real Estate Agent
When you initially decide to sell, you will need to find a licensed real estate agent to represent you. They will be responsible for marketing the home and representing you in the sale. This agent however comes with a fee – and in the state of Texas, most agents ask for a 6% fee, which is typically split 3% to the Seller’s agent (your agent) and 3% to the Buyer’s agent. Therefore, if you sell you home for $500,000, you will need to pay agent fees equal to $30,000.
Phase 2: Getting Ready
Once you hire an agent, it is time to put your house out on the market. Selling your home in as-is condition is extremely difficult unless you are marketing your home as a fixer-upper. This however drastically reduces your listing price; therefore, most homeowners take the necessary steps to upgrade and beatify their homes for the future sale. Here are two costs that are often incurred during this initial phase: (1) landscaping and staging costs, and (2) repairs, maintenance, and improvements.
These costs can vary depending on the condition of your home. For landscaping and staging costs, you can expect to pay around 2% for both combined. So, if you are selling for $500,000, expect to pay $10,000.
If you have been meticulous over the years, continuously repairing all minor and major issues with the home and installing upgrades as time passes, then your investment in phase two can be minimal. However, if you have been neglecting specific projects or avoiding certain upgrades, this phase can be costly. Before putting your home on the market, it is recommended to have a general contractor assess your home to determine the estimated budget for necessary repairs. (Which is another unwanted cost!)
Phase 3: Going Under Contract
Once you have vetted potential buyers, it is time to start negotiating the closing price. By this point the agent fees have already been determined. However, your agent will need to negotiate on your behalf what fees you will be responsible for versus what the buyer will be responsible for – these are commonly referred to as seller concessions. These additional fees can include escrow fees, inspection fees, transfer fees, etc. Depending on how well your broker negotiates, you as a home seller can expect to agree to pay on average 3% of the selling price. Again, this means that if your home is selling for $500,000, you will be responsible for paying $15,000 in closing costs.
Phase 4: Moving
Okay – now you have sold your home and are ready to enter into that new dream home. Unfortunately, this phase comes with its own unique expenses. If you are buying a new home, you will need to cover some closing costs on this new home.
However, if you are not buying, you will still need to prepare to pay for relocating costs. The amount this will cost varies greatly depending on your location and available resources. Are you moving in the neighborhood or relocating across the country? Do you need to hire a moving company? Will you need to get a storage unit? It is recommended to assess this price before selling so that you can have a full understanding of the total expenses of your move.
Do You Want Help Avoiding These Fees?
As mentioned, by the time you sell your home, you can be paying over 10% of the selling price on fees. This includes 6% to agents, 2% on landscaping and staging, 3% on closing fees; in addition, homeowners will be paying renovation and maintenance fees and moving fees. These all add up and can make the selling process undesirable.
However, there is a way to forgo paying these unwanted fees and sell your home quickly – sell to us, Gulf Sate Homebuyer. We are all cash homebuyers located in Baytown, Texas. We buy homes as-is and remove the unwanted fees for homeowners looking to sell. When you sell to us, there are no agent fees and no costs related to upgrades and repairs; also, we cover closing costs and can help you with relocating costs.
If you are considering moving and want to learn more about how you can reduce the fees you pay in your next move, contact us today to speak with one of our representatives.