The average real estate agent will get 5%-6% of what you make when you sell your home.
That’s a lot of commission!
The high price of realtors has led many folks to consider a private home sale as an alternative to hiring a real estate professional. Folks can save a lot of money by showing their homes in person and putting their own photos online. It could also lead to a quicker sale.
Does it cost you anything to sell your home yourself? Are there still fees associated with selling your home by owner?
Let’s take a look.
1. Transaction Costs
Even if you are saving thousands of dollars by not hiring an agent, you will still be responsible for closing costs of up to 2-3% of the amount of the loan. In high-cost regions such as New York or California, you may end up paying up to 5%-6% of the loan amount.
If you are unsure about how much a closing will cost you, check with a lender with special knowledge in your state or county.
2. Any Missed Payments or Taxes
If you are behind on any of your mortgage payments or taxes, you will likely be responsible to pay these before selling your home. If you are a co-op or condo owner, you will also need to pay any back homeowner’s association fees.
Keep in mind that you may also need to pay penalties for any back payments, liens, or taxes. These can impact your bottom line, so be sure you know what the terms of your loan are.
3. Payments While You Are Selling
Selling your home can take an average of 45-49 days. During that time, you are still the owner and are responsible for any mortgage fees and taxes.
You will also need to pay your utilities, including heat, water, and electricity. Maintenance costs, including landscaping, are also your responsibility.
4. A Real Estate Attorney
You may save money on a realtor, but a real estate attorney is a professional you may want to invest in.
Each state has its own regulations when it comes to real estate laws. An attorney’s help is not usually required, although many home sellers choose to use one. In some states, the attorney is only permitted to purchase documents, do a title search, and close the sale.
If you have expertise in real estate law or know someone who does, you might wish to draw up the papers yourself. If, however, you do not know anything about legal documents, hiring a real estate attorney is the right way to go.
A real estate lawyer may costs you up to $400 an hour. Their knowledge of zoning, mortgage fraud, building codes, and liens will enable them to work efficiently on your behalf.
When choosing a real estate attorney, check online reviews. Ask trusted friends or colleagues for recommendations. If you are always seeing similar comments in your research, you can get a pretty good idea of what your experience will be like.
Call prospective lawyers and make note of how you are treated. Do they seem to be listening carefully to your concerns? Are you confident that your case will get handled with professionalism?
Ask references about your lawyer’s timeliness and knowledge. Don’t hire a real estate attorney unless you are confident they will make your home-selling process efficient.
5. Transfer Tax
Even if you are selling a home yourself, you may still be responsible for paying transfer tax on the sale. This gets assessed at either the sale price or the fair market value of the property that is being sold.
State laws usually explain transfer tax as a set rate for every $500 in value. For example, in North Carolina, the transfer tax is $1 for every $500, or a rate of .2%.
Depending on the location of the property, the transfer tax can be paid by either the buyer or the seller. The two parties must decide who will cover the cost.
There may be a local custom when it comes to the transfer tax in your area. You can ask an attorney or tax professional with local knowledge for more information.
6. Title Insurance
The seller usually supplies insurance for the buyer that protects the buyer in case of any undisclosed liens or other issues with the home. When title insurance is purchased, a title company searches records for any types of ownership issues. It also seeks to remedy them before insurance is issued.
Title insurance costs around $830, but could cost more or less depending on your location and the size of your property.
7. The Cost of Repairs
In order to get the best price for your home, you may wish to do some basic repairs before selling. This could include fixing leaky faucets, repairing broken windows, or changing any outdated lighting fixtures and ceiling fans.
A fresh, neutral coat of paint can increase your property value and make your home more attractive to potential buyers. It makes the house look clean and well-cared for.
A professional painter will charge anywhere from $380 to $790 per room, depending upon your location and the condition of your home. Professional painters know how to do an immaculate job, leaving behind no spatters or patches. They have the knowledge and the best equipment and paints for making your rooms look fresh and new.
Be sure to hire a painter who is licensed and insured. Ask around for recommendations, and be sure to read reviews before hiring.
8. A Professional Cleaning
You will have the most confidence when showing your home if you know you have a great product to sell. A professional cleaning can cost you anywhere from $25 to $45 per hour, but a service can take care of cleaning problems you might normally overlook.
A home with waxed floors, polished furniture, and dusted corners will be much more likely to bring in good offers. If you are a busy professional, a cleaning service may prove well worth the investment.
The look of your home from the outside is the first impression prospective buyers will have of your property. A well-manicured lawn and a few pots of fresh flowers will go a long way toward showing guests that your home is well-cared-for.
Professional landscaping can range anywhere from $50 to $100 per hour, although you will pay more for bigger projects.
Professionally staging your home can cost anywhere from $1,195 to $8,850. The right professional will depersonalize your home with the buyer in mind. They will neutralize your decor and highlight your home’s best features, such as a fireplace or sunroom.
Your home staging company may bring in a sparse amount of furniture that they arrange tastefully along with homey accessories. They may showcase soft fabrics, or drape your windows with simple lines.
Elements such as flowers, pillows, and spa treatments add warmth and comfort to your home. Some home-staging professionals will even perform some minor repairs.
A virtual home staging company can add images of modern furniture to photos of empty rooms in your home. This is significantly less expensive than actual staging. Photos of virtually staged home can be added to almost every listing service.
11. Professional Photographer
A professional photographer can cost between $100 and $300 an hour. Only a professional will be able to take photos with the right light, angles, and composition to capture the emotion. They can also properly edit the finished product.
Today, 3-dimensional tours, virtual tours, and virtual floor plans are all extra images that photographers can supply for you. They will attract more customers to your listings online.
Without a real estate agent, you may find yourself footing the bill for a little advertising. This may include signs, flyers, and even online social media ads.
Your target buyer will determine where you advertise your home. For example, you may want to choose an online community group or parents’ organization if you are selling in suburbia.
A professional appraiser can do a quick market analysis to help you list your home at the right price. They can also help you identify areas of your home that could use work before selling.
Be selective when choosing an appraiser. You will want someone local and experienced who comes highly recommended.
The Cost of Your Private Home Sale
A private home sale could save you thousands of dollars in commission fees. It may also, however, require some creativity and the hiring of a few helpful professionals.
For more information on listing your home in minutes, visit us today.