In case you are planning to sell your house, you want to sell it at its highest value while mitigating the expenses. With regards to the cost, the expenses that you need to settle will depend on different factors. For instance, those who will choose to hire a realtor to manage their property should think about the 6% commission that will be derived from the profit of the seller. Other factors include the repair expenses, community fees, and property taxes.
Hidden Costs Related with Selling a House
Those who are planning to sell their property this year should do their research regarding the expenses associated with selling a house since it can possibly affect the profit that you may generate. This will also help you design a budget for your soon-to-be home.
The Commission of the Agent
This is one of the things that you need to know when selling your home. Normally, the seller should allocate 6% of the selling price on the agent’s commission. The 6% will be divided between the agent of the buyer and seller. This means that if the agent managed to sell your property at $300,000, at least $18,000 of the total sale would be reserved for the commission. You may also negotiate this fee; according to the research, at least 60% of the sellers have successfully received discounts on commissions.
In the event that your property is in its perfect condition, it may not require repairs. However, there is a great chance that you still need to update your property to boost the marketability of your home and secure the highest value possible. Applying paint, fixing simple cracks and repairing the loose parts can easily increase the cost. You may also be surprised that you are responsible for other repair expenses once you are in the process of selling your house. The prospected buyer will most likely hire a home inspector and will ask the seller to carry out repairs.
When you finally sold your house, the profit that you made will be used to settle your home loan. The amount that you need to pay off may not be the cost that is reflected on your final mortgage statement. This is the rate of interest accumulates daily. You will basically owe the amount of loan added with the prorated interest. In case it also comes with pre-payment penalty, you will also need to add this to the equation.
Additional Tax and Fees
In case your place has homeowner’s association, you will also need to pay HOA fees. If you have already paid your annual HOA fee, a fraction of the fee may be returned to you when the deals have been closed. You would also incur transfer tax that may amount to 0.01-2% of the selling price. You will also need to settle your property tax, in case you already pay for it there is a good chance that you will not owe anything.
Before selling your home, you need to expect the fees and expenses that you need to pay for. By equipping yourself with the essential information, you will be able to pocket the biggest percentage of your profit.