Unexpected Costs When Selling a House

Unexpected Costs When Selling a House

Real estate is also a business of selling homes, among other properties and it can be gratifying if done right at the moment with the current market trends favoring those who sell homes in the United States. So, as home prices continue to rise and the number of interested buyers exceeds the available homes for sale, more and more Americans are convinced it is the right time to list their homes. But then again, to ensure that one does not get caught up in a fix, there are some factors that one should be aware of before embarking on the sale of the property. Here is a list of the many costs homeowners are likely to incur when they decide to sell their homes.

Real Estate Agent Commissions

This is one of the biggest expenses that homeowners incur when selling their homes, and they are payable to real estate agents. For instance, a recent survey by Clever, a real estate platform, revealed that the commission costs were about $11,000 to the listing agent and $10,500 to the buyer agent. These commissions, which are expected to range from 5-6% of the home's final selling price, cannot be avoided, and while they can be bargained, they constitute a significant percentage of the selling costs.

However, it is important to point out that the commission structure may alter shortly due to a lawsuit that seeks to protect home sellers from the National Association of Realtors. If the settlement is to be approved it will force buyers to enter into other contracts with their agents and pay them directly; this will usher in radical changes in the working of the real estate agents.

Renovations and Improvements

There are several costs that homeowners incur when selling their property, including the cost of renovation and improvement of the home. According to the Clever report, the average seller invests about $10,000 in preparation for the listing and other small fixes in the house before and after the listing. These costs may range from a new paint job, well-maintained lawn, or new carpets to an expensive kitchen or bathroom makeover job.

As these alterations may prove useful in drawing the attention of the buyers or possibly even raising the value of the home, it is vital to determine which improvements are needed and which will render the most significant benefits.

Additional Selling Expenses

In addition to agent commissions and renovation costs, there are several other expenses that homeowners should factor into their budget when selling a home. These may include:

Home staging: Staging is a technique that can be used to present the house in the best way and grab the attention of potential buyers, but it entails some expense.

Marketing and advertising: Commissions for listing agents may include the fees for professional photography, virtual tours, and other advertisements for your home.

Moving expenses: When your home is sold, you will have to factor in the expenses incurred in the process of moving to a new home.

According to the Clever report, the median total cost of selling a home, including all of these various expenses, is $54,616.

Offsetting Costs with Sale Proceeds

Nonetheless, it is crucial to note that most of the costs incurred when selling a home are quite expensive, but most sellers do not feel the pinch so much at first instance. For instance, Danielle Hale, chief economist at Realtor. Com wrote: "Most of these costs are sourced from the proceeds of your sale, so you are not paying these up front, but it simply means cutting down your profit margin."

These costs may be easily covered by the proceeds from their sale as current trends show that there is high demand for homes due to low supply, which gives homeowners the leeway to negotiate for better prices.

Navigating the Selling Process

Home selling is a time-consuming and expensive process, but if one is equipped with the necessary knowledge, it is possible to pass through this phase more effectively. The various costs that sellers have to incur include the commission to the agent, closing costs, home inspection, home renovation, staging, and even landscaping, among others.

That being said, homeowners should keep abreast of changes that affect the real estate industry especially concerning the selling of houses and the costs that accompany it. Selling a home is not always easy especially if it comes with its surprises but with the right preparation and guidance, it can still be a fruitful and profitable business venture in the United States of America.