Do You Know How Much You’re Spending in Hidden Costs to Sell Your Home?
Selling a home obviously takes up a lot of time and money, but exactly how much money are we talking about? There are the obvious costs, such as real estate agent commissions. But there are also a host of other expenses that need to be factored into the equation, which may be small individually, but can really add up when all is said and done.
In fact, you’ll likely be spending anywhere between 2% to 5% of the sale price of your home! That means if your home sells for $500,000, you could be spending somewhere in the range of $10,000 to as much as $25,000. That’s why it’s so important to budget accordingly so you don’t find yourself strapped for cash when all is said and done.
Here’s where your money will probably go when it comes to selling your home.
Making Repairs
Your home should be presentable before the first buyer walks in. You can bet that they’ll be turned off by little things like chipped tiles, burned-out light bulbs, loose door hinges, and scuff marks on the walls. While you can probably tackle many of these minor issues on your own, many times a local handyman should be called in to make these repairs.
Take a walk throughout your home and carefully inspect all surfaces and components for any defects that warrant attention. Make a list of things that require updating or fixing. While you might think these issues are insignificant, buyers who notice them might think there may possibly be much more significant problems lurking. Besides, these seemingly minor issues just make a home look shoddy.
The cost associated with making these repairs can vary greatly, depending on the exact problems that need to be rectified. Whatever the cost is, be sure to factor that in to your overall budget.
Boosting Curb Appeal
If you want to encourage buyers to walk in the door, you’ve got to make sure the exterior of your property is in decent shape. Curb appeal speaks volumes when it comes to a successful sale and is instrumental in ensuring buyers have a good first impression of your home.
If your current landscaping could use some updating, be prepared to spend a little money. Costs will obviously vary, but the average amount to tackle a full landscaping job – including planting new trees, flowers, and plants – hovers around the $2,000 to $5,000 mark. Of course, you can always shave off a few bucks by doing some of the work yourself.
Taking Professional Photos
Most buyers start their home search by looking at properties listed online. As such, the images that you have posted need to be pristine, and the best way to ensure the highest quality photos is to have a professional photographer take pictures of your property. This is not the time to snap photos with your smartphone.
Buyers will decide whether or not a property is worth visiting based on its online presence. If the photos don’t impress buyers, they’ll be less inclined to book a showing.
Given the importance of these images, it’s well worth the cost to have professional photos taken. The cost for professional photography varies by the size of your home and the area you live in, but you can expect to spend around $1,000. Of course, you’ll be spending a lot more if you decide to have videos done or have aerial shots taken with a drone.
Staging Your Home
The idea of home staging is not only to make a home look more stylish and attractive, it’s also about creating a lifestyle for the specific pool of buyers that are looking in your area. Buyers need to be able to envision what life would be like living in your home, and the easiest way for them to do that is if your home has been staged appropriately.
Professional stagers will analyze the type of buyers in your neighborhood and will furnish and decorate your home accordingly. This could mean simply rearranging what you already have or bringing in pieces to achieve the ideal look.
Obviously, getting the help of a home stager will cost money, but you can actually expect to recoup that cost when you sell. A well staged home can actually sell for a higher price compared to a similar unstaged home. Sellers spend an average of $1,800 for professional home staging, though the price can be as high as a few thousand dollars. Having said that, staging a home can increase the sale price of your property by as much as 5%, so the initial staging costs can be more than recouped after a successful sale.
Keeping Up With Utility Bills
Whether you’re still living in the home or have already moved out, you’ll still need to keep up with the utilities. And if you’ve already vacated and are living in your new place, you’ll be stuck paying two sets of utility bills. The longer your home sits on the market, the more you’ll be dishing out for these monthly payments.
You can’t just leave your home dark and humid – the lights and air conditioner will still need to be operating to keep the home’s interior bright and functional. These costs will need to be factored into your overall budget.
Covering Closing Costs
Once you finally find a buyer, there will be a few closing costs that will have to be paid. In fact, consider this the biggest expense of your real estate transaction (aside from realtor commissions), and generally include the following:
• Land transfer taxes
• Mortgage fees
• Escrow fees
• Title insurance fees
• Liens against the property
• Unpaid HOA dues
• Prorated bills for utilities, property taxes, etc.
On average, sellers spend anywhere between 2% to 3% of the sale price on closing costs.
The Bottom Line
Selling a home certainly isn’t cheap, but as long as you are aware of all the costs associated with this huge transaction, you’ll be in a much better position. “Hidden” costs don’t have to be a surprise if you do your homework and take the time to make a list of all the expenses you’ll be responsible for covering, no matter how small they may appear to be. Luckily, a seasoned real estate professional will be able to run all of these costs by you so you can budget accordingly.
