Selling a house can get hectic and tiresome. Most homeowners expect cheques with large values when selling a house.
However, there are many hidden costs you have to expect when selling your property. Some of these costs can be covered by the buyer. The seller must account for most of these costs to determine the final amount the homeowner would receive after the sale.
8 Additional Costs To Expect When Selling A House
Some of the hidden costs a homeowner has to account for include the following:
1. Lawyer Fees
For the exchange of any property to go smoothly, you require the help of a professional lawyer. Selling a house is no exception. Your lawyer discharges the mortgage and title, verifies the return of all prepaid expenses, clears utilities, and handles the home transfer to the new buyer.
Always keep in mind that you’re in charge of paying for the filing of paperwork with the government, administrative costs like mailing documents, and disbursement fees.
2. Real Estate Agent Fees
This type of hidden cost applies to homeowners who plan to sell their homes through real estate agents and comes in the form of commissions which typically range from 3% to 7% of the final sale price. Some online sites can allow you to compare real estate agents and their fees. Click for more to get the best available offer that aligns with your budget.
Working with for sale by owner (FSBO) means that you have to do all the grunt work like choosing the right price, negotiating with potential buyers, and hosting open houses. This approach recommends offering a buyer’s agent some commission to encourage agents with eager customers ready to purchase.
3. Mortgage Discharge Fees
If you carry a mortgage on your home, a mortgage discharge fee would be required for the lender to release the collateral hold on your house. This expense is necessary for selling and transferring the property from the current owner to the new owner.
4. Mortgage Prepayment Penalty
Your lender may charge you a mortgage prepayment penalty depending on your mortgage terms. While the exact figure depends on the duration of years left on your loan and the interest rates, the liability typically lies around three months’ worth of interest on the outstanding balance.
5. Property Tax And Capital Gains Tax
On top of the 1% to 2% land transfer tax that differs in each province, you’ll have to pay for your share of property taxes. This amount varies depending on the procedure of your local region for collecting taxes and the time of year you sell. For instance, if you haven’t paid the taxes for the previous year, you’ll have to pay them before completing the home sale.
Suppose the home doesn’t stand as your primary residence and sells for more than you purchased. In that case, you’ll be required to pay a 50% capital gains tax on the difference between the selling price and the original purchase price.
6. Home Staging
After decluttering your home for open houses and showings, you might hire someone to stage your home for higher price offers and quick house sales. However, if you don’t have the finances to hire someone to stage your home, you can try doing it yourself. You can consider paying a house cleaning agency for deep cleaning the house. You can also have your carpets cleaned professionally to enhance the overall appearance of your property.
7. General Repairs And Home Maintenance
As a homeowner, you have to ensure that everything looks as good as new to avoid scaring off potential buyers. You may need to prioritize which repairs and maintenance services would help generate higher offers or will potentially be requested by the buyers. You can also decorate the home to increase its appeal and value when selling it.
A conservative kitchen would appeal more to a potential buyer than a new toilet. The same applies to having a new HVAC system, roof, or a fresh coat of neutral paint, a significant selling point to any buyer.
After a professional inspection of the house and the buyer submits an offer, they might request repairs like safety-related maintenance services. The homeowner can then negotiate the repairs to perform or reduce the final selling price to make up for it.
8. Moving Costs
Regardless of whether you choose to DIY your move or hire professional movers, it’s essential to have extra finances for the costs of a moving truck. Your budget should be more if you’re planning a cross-country move since you might probably stay a night or two in a hotel.
With an overview of all the costs associated with selling a home, you have to come up with an estimate of the final price of your home and start preparing for the additional expenses. Everyone wants to profit when selling, so investing back into the house would be clever to create a benefit.
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