Are you looking to conduct a home sale in Idaho? If so, you will need to know all the costs of selling a house. Otherwise, you’ll have trouble with the house sale and may not budget enough to cover the real estate transaction.
For instance, you’ll need to consider closing costs, title insurance fees, capital gains tax, the cost of home improvements, and seller concessions.
You may also need to pay for landscaping, attorney fees, and home staging. To find out the details about the costs of selling a house, keep reading. Let’s get started!
Costs of Selling a Home
So, what are the major costs of selling a house? Home sellers will need to foot the bill for a variety of home sale factors, such as:
- 5 to 6 percent of the home’s sale price to pay real estate agent commission fees
- 2 to 4 percent to cover attorney fees, the transfer tax, and more
- Seller closing costs including HOA fees, property taxes, and title insurance fees
Buyer’s closing costs are usually higher than that of the home seller, but you may still have to cover costs like the escrow fee, a courier fee, and a brokerage bill.
Other major costs you will have to cover as the seller include the fees for home repairs, major renovations, and landscaping to improve curb appeal. You may also need to hire a stager to organize your furniture and make the inside of the house more inviting to potential home buyers.
The selling process may also include a mortgage payoff for the rest of your loan amount. You’ll need to pay off your mortgage balance once you’ve sold the house.
To ensure that your potential home buyers can see your house lit up and check the plumbing, you’ll need to pay for utilities like electricity and water even if you’ve moved out of the residence.
You’ll also want the air conditioning working in the summer and the heat working in the winter. You can still work on ways to reduce your utility bills by turning off lights and electricity when no one is home.
Furthermore, you will have to cover the capital gains tax. If you sell your home for more than you bought it for, the profit counts as a capital gain and you will likely need to report it on your federal taxes.
However, many homeowners can exclude up to $250,000 in profit from the capital gains taxes or up to $500,000 for married couples who file their taxes jointly. Yet, you will need to ensure the house was your primary residence for at least two out of the last five years. Speak with a tax professional to find out exactly how much you may need to pay in capital gains taxes.
House Selling Costs
The real costs of selling a house also include factors like:
- Property tax
- Transfer tax
- Moving costs
- Pre-sale home inspection
- Seller concessions
- Home staging
- Home renovations
The sellers are responsible for paying the prorated part of the property tax until the closing date. The property tax money is usually put in escrow.
At the same time, if you’ve paid the property taxes for the whole year, you are likely to get a rebate after selling the property. The home buyer will reimburse the seller for any part of the property taxes he or she is responsible for after the closing date.
Certain real estate markets require you to pay a real estate transfer tax. That’s an extra fee that the local government charges to transfer ownership of a house from the seller to the buyer. Yet, many states do not require a transfer tax, so you may not have to cover that expense.
One major fee that many home sellers don’t consider is how much it will cost to move their belongings from their current home to a new place of residence. It can cost anywhere from $911 to $2,511 to hire movers.
Yet, if you’re moving many appliances and furniture or you’re moving across the country, you’re likely to spend even more on your moving costs. To save money on moving, you can try to DIY the move and load everything with the help of friends or family.
You may also want to complete a pre-sale home inspection to know what to repair before putting the house on the market. A pre-listing inspection can cost anywhere from $281 to $402.
If you complete specific renovations before a home buyer puts a bid on your house, you won’t need to worry about reducing the price or repairing any problems before closing day. Yet, the cheapest ways to sell a house include selling the place in its as-is condition to a cash home buyer.
Seller concessions are also an optional cost you can consider. If you pursue seller concessions, you will need to cover more of the buyer’s closing costs. For instance, you may pay for the appraisal, origination cost, and title insurance. If you’re selling in a buyer’s market, you can attract more buyers by offering seller concessions.
Another way to attract more buyers is to hire home stagers to help stage your kitchen, living room, and bedrooms. You can even consider renting new furniture. Research shows that 18 percent of seller’s agents stated home staging can raise the home value by 6 to 10 percent. Furthermore, home staging decreases the amount of time a house spends on the market.
You’ll benefit by landscaping the yard and adding more flower pots or bushes. Further, complete particular renovations that will increase the value of your home.
You may want to speak with a realtor or other professional to see which renovations will make the biggest impact on raising your house’s value. Generally, upgrading the kitchen and bathrooms leads to the biggest home value increase.
House Selling Commissions and Fees
The average cost of realtor commissions depends on the total cost of the house. The realtor fees are usually 5 to 6 percent of the home’s purchase price. For instance, if you sell a house for $200,000, you may end up spending as much as $12,000 to cover the commissions of the seller’s agent and buyer’s agent.
First-time home sellers may need to realize how steep realtor fees can get. The commission fee is one of the highest percentage-based costs associated with the house selling price.
The commission fee will get split between the buyer’s real estate agent, the seller’s real estate agent, and the brokers from the two parties. Homeowners will also need to consider the costs of paying off the mortgage lender, home inspection costs, and appraisal fees.
However, it is possible to negotiate a lower commission fee. A listing agent may take a lower commission fee if the home is expected to sell fast and the housing market is strong with plenty of home buyers.
Furthermore, you can avoid the commission fees entirely if you don’t work with a real estate agent and list the home as for sale by the owner (FSBO).
Generally, you can hire a realtor to help you price your home correctly. However, you can go around that by hiring an appraiser for around $200. Even if the appraiser costs you twice as much at $400, you will save around $11,600 if you avoid working with a realtor and sell your place for $200,000.
Yet, you should understand that selling a home without a realtor can get complex. You will need to manage the home sale contracts, market the house, and handle many other legalities. You’ll need to figure out whether to sell your house by yourself or work with a realtor instead.
Other Costs (Including Time and Effort)
You will also need to consider the costs of cleaning your residence, marketing the property, and getting professional photographs for listings. According to the Zillow Consumer Housing Trends Report 2018, the average price of deep cleaning your house is about $160.
If you’re not using a realtor, you will also need to cover marketing costs including:
- Creating print flyers
- Designing signs
- Posting listings online
- Producing open-house materials
However, you can post your home for free on Zillow. You may need to pay to list the property on other real estate websites. Research also shows that 68 percent of home buyers believe viewing professional photos of a house is at least somewhat important to them.
Generally, the realtor covers the costs of professional photography. However, if you’re selling the property under an FSBO, you will need to spend anywhere from $150 to $200 for professional photography.
Lastly, don’t forget that the time and effort you put into selling your house is priceless.
Now, you should have a pretty good idea about the real costs of selling a house. If you’re selling your property without the help of a realtor, you may want to consider working with cash home buyers in Boise.
Further, if you want to sell a house fast in Nampa, cash buyers won’t need to wait on mortgage approval and can complete the home-selling process in a few short weeks. Luckily, we buy houses Idaho locals love, so contact us today!