Expenses When Selling A Home
Buying a home can be expensive but so is selling a home. Expense when selling a home can skyrocket especially if you don’t plan ahead of time. Planning ahead of time is crucial because it allows you to find ways to reduce the cost. To give you an idea on which expenses you may incur during selling your house, read on. Also for a lower cost home sale you should consider to sell your house fast in California.
Expenses Before The Sale
Before selling your home fast, there are several upfront expenses that you need to spend on, first time home sellers or not. However, these expenses are a matter of choice depending on what your house needs. Below are the types of expenses that you may need to spend on before you sell your house.
- Painting: If the painting work in your house is no longer fresh, a new paint job can be a cost-effective way of improving your house. You can paint both the exterior and interior of your house and this can improve the market value of your home. If the painting job is big, you might consider hiring a contractor but if you have a knack of painting skills, you can go ahead and paint it yourself.
- Fixups: Fixup's are necessary such as replacing cracked windows or replacing stained carpets can improve the curb appeal of your home. There are many simple fixing up projects that you can do such as replacing sink fixtures can do wonders for your home. The best thing about this project is that you don’t need to spend too much money depending on the type of fixing up that is needed.
- Staging: Staging your home is very important to make it look very appealing to home buyers. Staging your home means that you have to declutter, reorganize, or even refurbish your home. Studies show that home buyers prefer to buy homes that are staged. When staging your home, you can get more benefits if you hire a professional stage. If you already have functional furniture, then you don’t need to spend that much. However, you do need to spend money on additional decorative pieces to spruce up your home such as new plush towels for the bathroom, rugs, cushions, and window treatments to name a few.
- Landscaping: Aside from improving the exterior and interior finishes in your home, it is also important that you consider improving your landscaping. Have your garden raked or tidied up if the landscaping was unkempt. If there is no landscaping, you can add new greenery and flowering plants to improve how your front yard looks.
- Get your house pre-inspected: Have a professional inspect your home for termites, pest damage, water damage, and other structural matters. This is to ensure that the house is in good condition before the home buyer moves in.
- Pay remaining balance on utilities: Before you completely move out, make sure that you pay all remaining balance on utilities. You need to leave the lights as well as eat on in your house while it is up for sale in case clients want to check the house. The thing is that they don’t want to enter a house that is dark and cold.
- Pay for extra home insurance for the vacancy period: Check with your insurance company and see if the current insurance still applies when your home is vacant. If not, you can ask for a rider so that the insurance still covers your home even if it is already vacant.
Expenses When Selling A Home At Closing
Aside from the expenses when selling a home that you need to incur before the sale, there are also other expenses that you need to spend on at the closing. But unlike the expenses before the sale, expenses at closing usually comes out of the sales proceed so there is no need for you to shell out money from your own pockets. The caveat, however, is that you will have to say goodbye to some amount that could have been part of your profit.
- Commissions to real estate agents: If you hired a real estate agent, you have to pay at least 5% commission that should be split between your buyer’s agent and yours. If you think that the commission to your agent is too big, you can negotiate your agent’s commission, but it is up to you. You can also forgo and agent completely and sell to a cash home buyer.
- Transfer tax: You need to pay transfer taxes as required by your city or state. The transfer tax takes only a small percentage on the entire sale price.
- House warranty: Whether the buyer asks for a warranty or not, it is important that you get a house warranty so that the buyer will feel secure about the purchase. A house warranty is a service contract that covers the repairs on your house within the first year of ownership. But unlike other home insurance, it only costs $500.
- Capital gains tax: When selling your home, you have to pay for capital gains tax. If you earn less than $250,000 on your home sale, you don’t have to pay for such a tax. But if you earn more than $250,000, you can look into items such as the cost of preparing the property and gains as it may allow you to have a deduction on your capital gains tax.
- Moving costs: Once your house is already bought, you have to move everything out, so you need to pay for moving costs including a moving van or a warehouse. However, you can save on this cost if you ask friends and family members with pickup trucks so that you can save money.
- Other closing costs: There are other closing costs that you need to spend on including fees for the escrow company, home appraisal, recording, and transfer of the property.
There are expenses when selling a home. Selling your house requires you to spend a certain amount of money. But this does not mean that you will end up losing a lot of your profit. You just have to make sure that you improve your home to also increase its market value. For tips on how to sell your house fast in Sacramento or other areas we service, visit us at Sell Quick California.