Grab Your Wallet: 7 Hidden Costs Home Sellers Forget
Did you know the average cost of selling a home is $20,851? While most of those fees are “expected” in the form of taxes and agent commissions, there are a lot of unexpected expenses that can come from deciding to sell your home. That’s just one of the reasons why the decision shouldn’t be taken lightly.
If you’re a first-time home seller, it’s vital to be armed with all the knowledge required to make a well-informed decision. With that said, here are some of the hidden costs that are easily forgotten:
#1. Potential Repairs
Depending on the condition of your home, there are likely repairs you’ll want to make before listing your home. And, even after making these pre-listing repairs, there could also be repairs requested by the buyers during their inspection.
Any homeowner knows that renovations can easily become extremely expensive, and it’s important to have an idea of the approximate end-costs before hiring contractors and making the leap. Whether it’s just a coat of fresh paint or you need to remodel your kitchen, consider these costs wisely and weigh them against the potential ROI.
#2. Staging Your Home
Sellers who want their home sold quickly should never skip out on staging. The decision to buy a home is based on a variety of factors but the ability to picture oneself living there is a big one. Professional staging helps buyers see themselves in their prospective new home. In fact, compared to unstaged properties, staged homes sell 88% faster and at a 20% higher profit.
However, like many other sale-enhancing strategies, staging isn’t free. On average, it’s estimated that most stagers cost between $300 and $600 for the initial consultation, and an additional $500 to $600 per designed room every month. Stagers may also need to buy new materials for the staging process, and clients are usually responsible for these expenses.
First impressions mean everything, so make sure that your potential buyers are greeted by a beautiful landscape. Sellers should think of landscaping as a method of ‘staging’ the home’s exterior.
By making room for professional landscaping within the pre-sale budget, sellers are showing shoppers that their property is cared for, well kept, and all-around lovely. It can create a strong positive first impression with potential buyers — both in-person and online.
#4. Potential Closing Costs
While closing costs are often paid for by the buyer, it’s not uncommon for them to ask for the seller’s assistance in covering these costs within their purchase contract. Before agreeing to these terms, sellers should weigh the pros and cons of their personal financial situation.
Closing costs can include fees, inspection costs, insurance, appraisals, taxes, and more depending on the specific deal.
Allowances are another item that can be overlooked when calculating the cost of selling your home. Let’s say your carpet is in less-than-perfect condition and you’re not planning on replacing it before selling your home. You could offer the buyers an “allowance” for replacing the carpet.
By opting for allowances, sellers can avoid making repairs themselves. While this may save time and money, it won’t completely cut out the expense.
#6. Agent Commission
While not a fee that is typically forgotten, there is sometimes confusion around who pays the agent commission. Agent commission rates vary; however, a common real estate commission is 6% of the purchase price of the property. The commission is typically the responsibility of the seller unless another arrangement is outlined in the purchase and sale agreement.
#7. Potential Lawsuits
While it may sound far fetched, sellers get sued by homebuyers more often than you may think — and that can be costly. Perhaps the biggest reason for a lawsuit is the failure of a seller to disclose past and present known defects of the property, which are most commonly outlined in the seller’s disclosure paperwork. This is one of the reasons why a properly executed seller’s disclosure document is a seller’s best safeguard against possible legal issues.
To learn more about how Glide is helping sellers and their real estate agents mitigate their risk in the disclosure process, be sure to browse our website. And, be sure to ask your agent if they’re using Glide!