Before you dream of making a huge profit on your home, consider these costs.
Selling a home could mean walking away with a nice chunk of cash. This especially holds true in today's market, where home values are soaring. Even if you owe a lot of money on your mortgage, you could pocket serious gains if you find a buyer willing to pay top dollar for your home. But before you start mentally counting your money, here are a few expenses you might incur while selling your home -- expenses that could seriously eat into your profit.
1. Last-minute repairs
You want your home in top shape when you list it. That way, you're more likely to find a buyer willing to pay your asking price. Also, you lessen the risk of an offer falling through due to issues uncovered during a home inspection. But home repairs can be costly, especially if they're things you can't or don't want to tackle yourself.
Do a walkthrough of your home, and make a list of what needs work. From there, you can break those items down by category -- those you can fix versus those you need to outsource. Once you've done that, get quotes from contractors so you know how much to budget for. If you get a few estimates for each repair, you may find that one professional offers a better rate for one project, while another offers a better price on a different repair you need.
2. Home staging fees
Staging a home means setting it up strategically to attract buyers. Often, that means removing or adding furniture and incorporating the right decorative items to appeal to a wide range of buyers.
While you don't need to hire a professional home staging company to set up your home, it can save you a world of time and hassle. The average home costs $1,320 to stage, according to Home Advisor. The fee usually depends on the size of your home and how much work it needs. As is the case with repair work, get a few quotes to compare.
3. Real estate agent fees
Given that it's a seller's market today, you may be inclined to sell your home without a real estate agent. But remember, agents are experts at marketing properties, and if you work with one, you may score a higher price for your home. Also, working with a real estate agent means someone else handles the logistics of addressing buyers' offers and dealing with contracts -- things you might struggle with on your own.
The only drawback to using a real estate agent is the fee. Typically, agents take a 4% to 6% commission on the sale of your home. If your property sells for $300,000, you lose $12,000 to $18,000 off the bat. However, it's possible that the agent's expertise can get you a selling price that more than makes up for that fee. Some agents are willing to negotiate their fees, so it doesn't hurt to ask.
They say it takes money to make money, and that holds true when you're selling a house. Knowing what expenses to prepare for helps you avoid stress -- and disappointment -- on the road to finding a buyer.
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