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How_Much_Does_It_Cost_to_Sell_a_House?

Fola Ajisafe, Realtor

If you’re selling a home, you’ll want to know how much it’s going to cost you to close the deal. That way you can make a plan for buying your next house.

In addition to what’s needed to pay off your mortgage, it’s smart to plan to spend about 10% of the home price in selling costs. But some things are optional.

Selling your home: common costs

Real estate agent commissions: The seller’s agent usually charges 5% to 6% of the home purchase price when the deal closes. This is likely the biggest expense you’ll pay. Seller’s agents usually split commissions with buyer’s agents, who generally don’t charge their clients.

Commission fees are negotiable, however, and many real estate agents charge less. Some even accept a lower flat rate for their services, so it can pay to shop around. You can ask for recommendations from friends and neighbors, and search home shopping websites for local referrals. Whichever seller’s agent you choose, make sure you agree on commission terms in writing.

Taxes and neighborhood fees: You’ll owe a prorated share of property taxes when you sell your home. The amount could be close to zero if you’ve recently paid taxes, or several thousand dollars if the due date is around the corner.

In some states, you may also be charged a local transfer tax, which the seller pays in order to change the title from one person to another. Depending on location, the tax is generally 0.01% to 2% of the sales price. In addition to the local taxes, you may also face capital gains taxes if the profit you make from selling your home is more than $250,000 ($500,000 for married couples on joint tax returns).

If your neighborhood has a homeowners association, expect to pay prorated membership fees. You or the buyer may also need to pay an HOA transfer fee.

Title insurance for the buyer: This protects the buyer in case there’s an issue with the home’s ownership history.

Buyers also purchase a title policy if they apply for a mortgage, but that policy only protects the lender. Traditionally, the seller buys a separate policy for the new homeowner. The cost ranges from about $500 to $1,000.

The title company will run a title search on the property during the sale process. If a lien on your home is revealed, you’ll also need to settle it before you can sell the house.

Your current mortgage: It’s no surprise you’ll need to pay off your mortgage when you sell your home. But the payoff amount is probably different from the balance due listed on your last mortgage statement, because of interest charges. You’ll want to know the payoff amount. If your mortgage has a prepayment penalty, that will be added to the amount due.

Home repairs: Your buyer will probably order a home inspection before closing. If the report reveals problems, you may be asked to pay for repairs.

Moving costs: Whether you buy boxes, pack and move them yourself or hire a company, you’ll want to budget money for the actual move.

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