Selling a house is a major life event, and it can be a complicated process. Knowing what to expect in terms of costs is essential to ensure that you are prepared for the financial implications of selling a home. In this article, we will provide a comprehensive guide to the costs of selling a house, so you can be informed and prepared for the process.
Selling a house is like running a marathon: it requires a lot of preparation and dedication, and there are many costs along the way. Just like a marathon, the costs of selling a house can be broken down into several categories, such as legal fees, marketing costs, and closing costs. Knowing what to expect and being prepared for the financial implications of selling a house can help make the process smoother and less stressful.
1. Overview of the Cost of Selling a House
The cost of selling a house can vary greatly depending on a variety of factors. Generally, the cost of selling a house includes the cost of repairs, closing costs, real estate agent fees, and other miscellaneous expenses. Additionally, you may also have to pay taxes on any profits you make from the sale of the home.
Repairs and Upgrades |One of the most significant costs associated with selling a house is the cost of repairs and upgrades. Depending on the condition of the house, you may need to make repairs or upgrades to make it more attractive to potential buyers. This could include anything from replacing broken fixtures to remodeling the kitchen or bathroom. The cost of repairs and upgrades can vary greatly depending on the scope of the project, so it is important to get an estimate from a contractor before committing to any repairs. This is usually the case when you list with a realtor.
2. Closing Costs
Closing costs are the fees associated with the sale of the house. These include things like title insurance, transfer taxes, property taxes, and other fees associated with the sale. Closing costs can vary depending on the state and municipality where the house is located, so it is important to research the closing costs in your area before listing your house.
For example here in Philadelphia, transfer tax is roughly 4% which is split between buyer and seller most times. And it’s based on the sale price of the home. If you decide to work with a local home-buying company you might be able to get them to cover the entire cost.
When you work with a local cash buyer like Philly Home Investor they usually pick up all the fees associated with the sale of your home leaving you with more profits and cash in your pocket! We urge you to reach out to a few of them and see which ones can help you save your hard-earned money. The total amount you can save can be very significant.
3. Real Estate Agent Fees
Real estate agents can be a great asset when selling a house, as they have the knowledge and experience to help you navigate the process. However, they also come with a cost. Most real estate agents charge a commission fee, which is typically a percentage of the sale price of the house. This fee can vary depending on the agent and the market, so it is important to shop around and compare fees before selecting an agent.
In the Philadelphia region, the average agent commission is around 6% or higher depending on the agent and experience. Also, when listing your property with an agent they really can’t guarantee a time frame in which the property or home will sell. Could be a very fast process or a very long process depending on the type of property and price listed.
When you work with a company like Philly Home Investor you pay zero in fees. If your property is in need of work you might be better off reaching out to a local credible home-buying company.
4. Preparing the Home for Sale
In addition to repairs and upgrades, you may also need to make some changes to the home in order to make it more attractive to potential buyers. This could include things like staging the home, painting or making minor repairs. The cost of these changes can vary greatly depending on the scope of the project, so it is important to get an estimate before committing to any changes. This can also include things like getting an inspection done to make sure there are no issues in the property.
The benefit of working with a local home buyer is that most of the time you don’t need to make any repairs or upgrades. Most home-buying companies including those like Philly Home Investor will literally buy your property or home in as-is condition. Meaning you don’t have to do a single thing, even if it’s a hoarder house they will handle the entire cleanout at no cost to you. The cost of selling your home can be dramatically reduced when working with a company like this.
5. What are Capital Gains Taxes
When you sell a house, you may be subject to capital gains taxes. This is a tax on the profit you make from the sale of the house, and the amount you owe will depend on a variety of factors, including the amount of time you owned the house and the amount of profit you made from the sale. It is important to consult with a tax professional to determine your capital gains tax liability.
If you are worried about capital gains taxes we suggest you look into 1031 exchanges which would allow you to save on capital gains if you were to purchase another property after your sale of yours.
6. Moving Expenses
Finally, you will also need to factor in the cost of moving. This can include things like hiring movers, renting a truck, and packing supplies. Depending on the size of your move, these costs can add up quickly, so it is important to plan ahead and budget accordingly.
At Philly Home Investor we have even provided extra money for sellers to help with moving expenses. There are LOTS of benefits when working with companies that buy homes for cash vs listing with a real estate agent.
7. Legal Fees
In addition to the costs mentioned above, you may also need to factor in legal fees. This can include things like hiring a lawyer to help with the paperwork and other legal aspects of the sale. The cost of these services can vary greatly, so it is important to shop around and compare fees before selecting a lawyer.
Most of the time legal fees are not part of the sale but depending on which city and or state you are located in the sale of your property might require a lawyer. Another example would be the case of inherited property. Most people don’t want to go through the probate process so hiring a lawyer could expedite the process.
8. Stagging The Property
Staging the property is another cost that can be associated with selling a house. This involves making the property look more attractive to potential buyers, and can include things like painting, cleaning, and making minor repairs. The cost of staging can vary greatly depending on the size and scope of the project, so it is important to get an estimate before committing to any changes. This will usually be the case when working with an agent as they will “try” and market your property luring sellers in by having good pictures and marketing material.
9. What If I Still Have a Mortgage
If you still have a mortgage on the property, you will need to factor in the cost of paying off the loan. This includes any remaining principal, interest, and closing costs. It is important to make sure that you have enough money to cover these costs before you list the house for sale. This process is usually completed at the time of sale and handled by the title company. You may be required to order a mortgage payoff during the process but most times the title company is able to handle everything.
10. Benefits of Working With A Local Home Buyer
Finally, if you are looking to sell your house quickly and without the hassle of dealing with agents, you may want to consider working with a local home buyer. These companies can often purchase your house in as little as a few days, and they will usually cover all of the costs associated with the sale. This can be a great option for those who need to sell their homes quickly and without the hassle of dealing with agents.
Philly Home Investor has been serving the greater Philadelphia region for over 7 years now. We specialize in buying homes quickly and for cash, so you can avoid all the hassle and costs associated with selling a house. Contact us today to learn more about how we can help you sell your house fast.
And if you don’t believe us be sure to check out our reviews to see what others have to say. We understand not all companies are creditable these days which is why we go above and beyond to make sure it’s a win-win for everyone.