When the real estate market was better, sellers usually planned on walking away from the sale with a nice profit that they could bank, spend, or more likely, put down on their next home. There have always been expenses connected with selling a home, but in these days when home prices are down, times on the market are up, and buyers are more prone to drive a hard bargain, sellers are much more attuned to what those costs are.
Though some buyers want a "fixer-upper", all buyers at least want to know what they're getting into. You, as a seller, don't want to be broadsided by an inspection report when an unknown problem surfaces. It is money well spent to have the home inspected for both physical problems and pests before putting it on the market. Then you can make the decision to at least fix the leaky faucets and disclose other issues. Offering your buyer a home warranty for a year might give you a competitive edge in this tough buyer's market.
In addition to necessary home repair, it is time and money well spent to clean the house (maybe even professionally), spruce up the yard, freshen up the paint, and maybe even replace carpeting. However, not all home renovations yield increased sales value, so it's best to check with a real estate agent or read up on what improvements are a good investment.
De-cluttering the home and arranging furniture and possessions in an inviting manner is so important that professional home staging is a booming enterprise today. In an era when the market is glutted with homes, a professionally staged one might be the one that sells more quickly.
Real Estate Commission is a big ticket item on the list of home sales costs as it ranges from 4-7%, with 5 to 6% being the norm. Even if you, as seller, negotiate a lower rate, the dollar figure of most real estate commissions is high enough to make many sellers consider For Sale by Owner or going with an internet realtor that offers a package of services for $995. Though the potential cost savings is attractive, real estate sales is time consuming work that often requires the professional touch of a licensed realtor. These days, the negotiation that realtors do between buyers and sellers is what reduces the number of days on the market and increases the selling price for a particular property.
Closing Costs, the fees for title transfers, county transfer taxes, escrow charges, and miscellaneous items, have always been the buyer's responsibility but have often been negotiated to be paid by the seller. In the current housing market, sellers are more often asked to absorb these costs.
Any property taxes due will be taken out at closing. For sellers who pay their taxes along with the mortgage, this is a non-issue, but taxes can reduce the profits for those who pay semi-annually or who are in arrears.
The old adage "you have spend money to make money" applies in home sales, especially in a tight market. Obviously, some costs like taxes and fees are non-negotiable, but as a seller, you can seek advice early in the process from a qualified real estate professional who can help you make the best choices for how to spend the other dollars that will buy you the most competitive advantage.
See also:
Jodi Bakst, CRS, GRI, ABR, CDPE, CLHS
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