When you decide to sell your home, there are many items to take into consideration. The price at which you sell your home will not necessarily mean more money in your pocket. Selling a home isn’t free, unfortunately. There are fees for which you’ll be responsible. You’ll likely be working with a real estate agent to sell your home. You’ll have to pay your real estate agent’s commission from the proceeds from the sale of your home.
Of course, you’ll want to get a home appraisal which means you’ll need to pay for the appraisal. Since most homes aren’t ready to go on the market without some staging, you may need to pay for staging. The seller may also be responsible for some of the closing costs so it’s a good idea to know what you may be responsible for on closing day to avoid any surprises.
While we do list closing cost estimates and ideas within the context of this content, we want to start off by saying these are just estimates and can be different depending on a variety of factors. What this list does accomplish is giving you an idea of what to expect in your initial plans.
💵 How Much Are Commissions?
When you hire a real estate agent to sell your home you’ll be responsible for paying their commission when your home sells. Some sellers think they are getting ahead by selling their home on their own because they are avoiding the commission paid to a real estate agent. However, those who choose to do this likely don’t realize they could be losing thousands of dollars. The fact is that an experienced real estate agent provides valuable advice from setting the asking price, to staging your home and making it to closing. An agent’s advice adds value to your home. An agent is also your advocate when it comes to negotiating with buyers and will work on your behalf to extract the highest price possible for your property. So, in the end, it is more advantageous to use the services of a real estate agent. The value an agent adds to your home will surpass the cost of the commission you’ll be paying likely by thousands of dollars.
You’re probably wondering just what kind of commission you’ll need to pay a real estate agent. Some agents ask for higher commissions while others are lower. The commission can be negotiated. Don’t go with an agent just because they are willing to work for the lowest commission. You’ll want to choose an experienced real estate agent who knows your market.
💲 How Much Are Appraisal Fees?
An appraisal is an important step in the home selling process. You need a starting point when pricing your home and an appraisal is a good start. An appraiser who has a solid knowledge of the market conditions and your neighborhood will be able to appraise your home and provide you with an accurate view of what your home is worth. Because pricing your home to sell is a difficult part of the process, an appraisal can mean the difference between pricing your home too high or too low. If you price the home too high, buyers are going to be turned off and will likely not even want to look at your house. They will simply move on to the next property that is more reasonably priced. On the flip side, if you price your home too low, you could lose a lot of money. You might have a lot of eager buyers and will be able to sell your home quickly, but you don’t want to lose money in the process. Your goal should be to extract the maximum value from your home when you sell. An appraisal can help you accomplish this.
Appraisal fees can vary greatly so it’s best to meet with a few appraisers and learn what their fees are. Of course, you’ll want an experienced appraiser so that you will receive an accurate assessment of your home. When you order an appraisal, you can typically expect to pay anywhere from $300 to $500. Because an appraisal can save you thousands of dollars, it is well worth the cost of the appraisal.
🏡 What Does It Cost to Stage a House?
Likely, your home is decorated to fit your personal style and taste. What appeals to you won’t necessarily appeal to prospective buyers. You’ve spent years making your home your very own. But, when it comes time to sell, you need to stage your home so that buyers will be excited about the possibility of buying your home. You may need to add a fresh coat of paint to refresh the rooms. When choosing paint, go with something that is neutral. Buyers need to be able to walk into a room and envision what it will be like to live there. This is more easily done if rooms are done in neutral tones.
Staging a home doesn’t have to be expensive. It could mean just adding some fresh paint or it could also mean making some major renovations. It will depend on your budget. However, you may want to hire an experienced professional to stage your home. They will have knowledge regarding the proper placement of furniture and can really make the rooms in your home stand out. Most people don’t really know how to arrange items in a room to maximize space and make a room look beautiful. Remember, it is up to you to get buyers excited about your home. They are not going to be too excited if, when walking through your house, they are tripping over furniture and other clutter. A staging professional can ensure your rooms are neatly arranged and look great. A professional stager’s primary function is to highlight the assets of your home while drawing attention away from problem areas.
Typical staging costs will include a $300 to $500 consultation fee. A professional stager will then charge $500 to $600 per month per room. A common practice of staging professionals is to commit you to a three-month contract which could bring your final bill to $2,300 for staging. If you sign such a contract, you’ll be responsible for the entire amount even if you sell your home within 24 hours of signing such a contract. Keep in mind, however, that despite the cost, a home that is professionally staged will likely sell quicker than other homes on the market. You’ll get a good return on your investment because a staged home is much more appealing than those homes that haven’t been staged by a professional. This means more money in your pocket because buyers will be willing to pay more for a home where the assets are showcased.
💰 What Are Typical Closing Costs?
The sale of a home always includes closing costs. Closing costs are separate from the commission you pay to your real estate agent. Some will be the responsibility of the buyer. Others will be paid by the seller. Closing costs range from one to seven percent of the total sale price of the home. You should have a good idea of the closing costs for which you’ll be responsible so that there are no surprises when it comes time to close on the sale of your home. Some costs can be negotiated so keep that in mind and you might be able to pay less for closing costs in the end. The seller is typically required to pay the following closing costs:
Title insurance fees are required to prove that you do own the home and are able to legally sell it. This protects the buyer’s investment in the event someone makes a claim of ownership to the home after the sale.- Loan payoff costs will need to be paid when you close on the sale of your home. Because mortgage payments are not paid in advance, lenders will prorate the amount of interest you will owe when you pay off the mortgage at closing. To get an idea of what your payoff amount will be, a good rule of thumb is to add one mortgage payment to the balance of the loan.
- Prepayment penalties may be assessed by your lender if you pay your loan off early. Some lenders will charge a prepayment penalty while others will not. Your lender was required to disclose this to you when you obtained your mortgage. Such penalties can be based on the remaining balance of your loan or could be on a sliding scale based on the age of your loan. It is best to check with your lender to determine if there is a prepayment penalty and what that fee might be.
- Homeowner’s Association fees that are unpaid will be your responsibility. If there’s a cost to transfer the property to the new owner, you’ll be required to pay any such transfer fees. Transfer fees can range from $100 to $400. To get a better understanding of such fees, you should contact your homeowner’s association.
- Transfer taxes will be your responsibility as the seller. Transfer taxes, also referred to as recording fees, are charged by your jurisdiction to record the transaction showing the transfer of the title from the seller to the buyer. These fees will depend on the state in which you live. Some states charge a flat fee while others will base the fee on the selling price. Arizona charges a flat transfer tax fee of $2.
- Attorney fees will need to be paid if you have an attorney represent you at closing. An attorney will charge you anywhere from $150 to $350 per hour. The final cost could be as low as $500 but could rise to $2,000 or more depending on the complexity of the transaction.
Buyer’s credits are those fees for which you’ve agreed to cover for the buyer at closing. Buyer’s credits will depend on what you’ve negotiated with the buyer and will be stated in the purchase contract
😃 How Do I Choose a Real Estate Agent to Help?
A real estate agent is a valuable resource not only with the home selling process, but also when it comes to the closing. There’s a lot involved in getting to closing and the closing itself. This is where we can help!
We can offer advice regarding choosing an appraiser to appraise your home. We can also offer staging advice and refer you to staging professionals in the Phoenix area. We’ve attended many closings, and we know the typical costs for sellers. For this reason, we can keep you informed throughout the selling process. It’s important to us that you feel as little stress as possible when it comes to selling your home.
Remember, we will be your advocate from the time you decide to sell your home all the way to closing. We will be there to answer your questions throughout the process and can help you get the maximum value for your home. We may also be able to help you negotiate some of the closing costs.
You will likely experience a little stress and anxiety when it comes to selling your home, but we want to assure you that we’ve had many successful sales in the Phoenix area. While you may look at the list of possible closing costs we’ve listed and feel a bit overwhelmed, it’s important to keep in mind that these are general ideas and your situation will be unique. In some cases, the buyer will offer to pay part of the closing costs, but you may find it beneficial in the sale to offer to pay them on your end. We’ll discuss this in depth when we are coming up with the marketing and negotiating plans for your property. There are benefits to handle closing costs both ways, but that depends on your sale goals and other factors.
Keep in mind that we are here to represent your best interest, and we are committed to giving you a positive home selling experience.
Your real estate agent is the best source of information about the local community and real estate topics. Give the 10X Home Team a call today at 602-352-3600 to learn more about local areas, discuss selling a house, or tour available homes for sale. Ask an Expert here!
