How much to expect in costs in total
The cost of selling your home is between 10% to 15% of your home’s sales price. However, the cost will vary depending on the market. Whether it is a seller’s market or a buyer’s market. Below are the costs you should expect.
The costs
Pre-sale inspection
This is optional but recommended. The pre-sale inspection let you figure out if there are any major issues that needs fixing in the home. It costs around $300-$700. Doing a home inspection helps you know the condition of your home and when it comes to negotiation with buyers this may help speed up the process. If it reveals any major issues, you will know what to repair or you would know how much to negotiate for with the buyer due for the issue.
Repairs
Doing repairs will depend on what is being fixed. Know that there are things you should not fix, if it is not a major issue do not repair, your home does not have to be perfect to sell.
Curb appeal
Taking care of the lawn, the bushes, the hedges etc. should also be taken into consideration, painting the house anew or pressure washing it, as well as the pathways and driveway may be some things you do depending on how the house looks.
Real estate commission
Real estate commissions is one of the main costs when selling your home. They are negotiable, and the agent will let you know the commission they are charging on the home appointment.
Taxes
Property tax
You will owe property taxes on your property for the fiscal year, so, your taxes will be split between when you occupied the home and when the buyer will start occupying the home. You will pay your portion of when you owned the home during year, and the rest will be payed by the buyer since they will be the new owner.
Transfer tax
This is to cover your government processing the real estate transaction. It is charged when a property switches ownership. In Massachusestts, the transfer tax is on average $4.56 per $1000 of the sale’s price. If you sell your home for $1,000,000 then it would .00456 times $1,000,000 which is $4560.
Capital gain tax
You pay this tax on the profit you make on selling your house. Capital gain taxes is expected to be payed if your profit on the home exceeds $250,000 or $500,000 for married couples filing jointly.
Lawyer
It is a good idea to get a lawyer since they are well trained in contracts and they will have your best interest forward in addition to your real estate agent. It is a good idea to have a team when selling your home. A real estate agent, your lawyer.
Paying off your mortgage
If you owe money on the property, from the amount you sell your home for, the mortgage will be deducted to pay off that loan. Additionally, to go forward with the transaction, you will need the payoff letter or a statement from the mortgage lender. That letter will show how much you owe the lender.
Incentives for buyers
If you included incentives for buyers, that will also be considered as your closing cost. To sweeten the deal or to sell your home fast, sellers sometimes include incentives to buyers.
Paying points towards buyer’s mortgage, covering some buyer’s closing costs, paying property taxes for the first year, originations fees, and recording fees are some of those incentives.
Moving costs
You might be moving from one home to another so the costs to hire a moving company must be taken into consideration as well.
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