Calculating the Bottom Line of Closing Day

Calculating the Bottom Line of Closing Day: Knowing the Cost of Selling a House

When many homeowners are planning to scale up or down, it is not surprising that their first questions are related to how much they can expect to gross after the sale. Some would think that once you put the property up to list as if it were Broadway or Park Place in the famed Monopoly board game, it just takes a buyer to be happy with it, give you an offer, and move on in profited glee!

The real truth of the matter is that how much you'll pay to sell your home depends on a number of different factors. While every home sale is different and laws vary by state, most sales of residential property will see the same types of fees and costs as other locations. For the most part, if a home is pricier, it will most likely see higher expenses in all areas.

According to estimates from Realtor.com, a seller can expect to part with approximately 6% of their home sale price for the commission that the Realtor is due. This percentage is typically split between buyer's and seller's agents, then doled out accordingly between all brokers involved in the transaction.

So if your home is listed for $250,000, a real estate commission can take up as much as $15,000 of that sale. Many homeowners who are now ready to sell dispute this procured amount, and Redfin themselves found that 60% of those who wold a home during the past year received some form of discount or rebate on their commission.

Since inventory is low across the nation, many agents are competing at quite dire odds for the business that seems to be slowing a bit, and those in the iBuying sphere are offering their high-powered web tools and local agents' expertise at a discount. One important thing that every homeowner needs to consider is that this transaction is not simply “Putting it on the MLS and hitting autopilot”: there are multiple offers, inspections, other negotiations, and various contracts seeing back-and-forth momentum.

If the property you want to sell happens to be in perfect shape and ready to move in, you could be one of the lucky individuals that do not need to have any repairs done before you take the steps to sell. But if you do, it may mean coats of fresh paint, ceiling repairs, or finally taking a closer look at some of the smaller nooks and crannies that need some attention and personal care.

Once a sale is underway, you may be liable to complete other repairs as well. The buyer will set forth a date for a home inspection, and any major faults will be under scrutiny as a condition of the overall sale. Some of these costs are quite unpredictable, but when they arise to carry the weight of dire importance.

Immediately after your home is sold, taking care of the existing home loan is the first order of business. Since interest accrues, what you owe in the end will be the principal of your loan in addition to the prorated interest that accumulates until the very day of your closing. There are still some mortgages that have a pre-payment penalty, another element you'll need to consider in the final cost category.

If your new neighborhood has a homeowner's association, you'll have to pay a prorated share of the monthly or annual HOA fees. If you have already had the foresight to prepay those fees for the year, a portion may be credited back to you during the closing, or you can choose to see the amount carried over as an asset during the coming term.

After your home sale transpires, capital gains taxes are another home sale expense. If this profit from the home exceeds $250,000 for single individuals or $500,00 for jointly filing married couples, you will definitely owe said capital gains taxes on any amount above and beyond that threshold. If your home sale nets a profit that is less than those amounts, you can keep them free and clear of taxation if you have taken up residence in your home for two out of the five years before you chose to sell.

Property taxes are one element wherein the exact time of year always comes to play, and they are sometimes paid in arrears. This simply means that you have to pay a bit extra to bring the property taxes to an up-to-date condition regarding your buyer. You may need to pay property taxes until the day the actual home sale closes, or you may owe thankfully next to nothing.

Title insurance protects the buyer in case there are gaping problems with the home's title or chain of ownership. It is usually the buyer's debited cost but in some cases, the seller may splurge. Title insurance usually runs around $900, and if an existing lien of any type is discovered on the home before you close, you'll be responsible for that before you are free and clear to sell.

A home warranty is usually an optional cost, but having one in place for potential buyers can you ultimately sell the property. The terms of these warranties vary, they tend to hone in on repair or full replacement costs for the major appliances included and are renewed on an annual basis. Prices for a home warranty in this area hover around $550 per year.

During buyer's market conditions, a seller could be asked to cover part or all of the buyer's closing costs to assure the deal is completed. These costs usually are around 2% to 5% of the home's value, and typically include appraisal costs, mortgage fees, and other various transaction-related services.

Asking your friends that own pickup trucks to help can save you some money when you most need it – but it may consume a large chunk of your time. Here at Dorrmat.com we offer services that help you with this burden, a cash offer on your proposed property, and other amenities that help greatly with the cost and time-consuming aspects of selling a house.