7 Ways Selling a House Costs Money
When selling a house most homeowners dream about the large chunk of money that is going to be deposited into their bank account. No matter if this money is going to a new mortgage or just into savings, it is an exciting thought.
Many homeowners fail to realize that while money will be made from selling a house there are expenses, as well. In fact, a lot of the money made is going to go towards paying these various charges and fees.
Pre-Sale Repairs
Showing a house that needs a lot of repairs is setting a homeowner up for disaster. Buyers will see these problems and either not make an offer or expect the price to be lowered to accommodate the repairs. Doing the repairs before showing the house will help avoid this price negotiation and keep the buyers happy about the condition of the house.
Even though it is tempting to go cheap with repairs, don’t. A bad repair is worse than no repair at all.
The inspector, real estate agent, or the buyer themselves are likely to notice if a repair job has been botched. They will still ask for compensation for the fix that is still required or ask that the job is done again.
Advertisement Photos
Many people learn about houses that are for sale on the internet. There are many sites dedicated to selling houses and the pictures that are used are a vital component of the selling process. Buyers will make judgments from these photographs before they see the house in person. A beautiful photo may make someone fall in love with a house, even though photos can be deceiving.
Hiring a professional photographer costs money, but it is worth it. They will know what lighting is best, how to stage the area, and how to make every room look fantastic. With professional photos, the house is sure to generate a lot of foot traffic and in turn get more offers.
Yard Work
After photos, the yard and outside of the house will be the first part of the house that a person sees. Many people will drive by a house before viewing it to see if they want to schedule an appointment with their real estate agent.
Having great curb appeal will help get people in the house and looking. A lot of yard work can be done by the homeowner, but it can be much easier to allow a professional to take over the project.
The lawn should be well manicured, bright flowers should be in all the flower beds, the door needs re-varnished or painted, and all outside lights should be cleaned and maintained. With new paint and working outdoor lights, the house will be visible at any hours of the day. Since many people will have to dry by after work and in the dark, ensuring there are no burned out lightbulbs is important.
Stage the House
A staged house sells much quicker than an un-staged house. Home stagers know what buyers are looking for when they enter a house. They will set up every room in a way that welcomes buyers to look around and to imagine their own family living in the house.
Home staging can be expensive, but more buyers have been found to offer higher amounts on staged homes versus homes decorated by the current owner.
Paying for Two Houses
If the homeowner is no longer living in the house, it can be frustrating to pay two sets of bills. While it is expensive to continue running electricity to the old home, it is much more comfortable for the potential buyer.
Depending on the weather a buyer does not want to walk through a house that is freezing or very hot. They also would like to view a house with the lights on.
Gains from Closing
A homeowner that is selling their home for a lot more than what they bought it for may be elated until they realize they need to pay capital gains tax on that money. This is calculated with the purchase price of the home and the selling price with considerations for improvements that have been completed.
Up to $250,000 can be excluded if filing taxes as single and up to $500,000 if married. Talking with a tax accountant can help a homeowner best understand their capital gains tax.
Costs from Closing
Closing costs are a large chunk of what money will be spent to sell a house. These costs can be up to two percent of the sale price.
Typically, the buyer will choose what closing company to use. These closing costs are typically predetermined and will cover a variety of fees. While it can be negotiated that the buyer pays for closing costs, most buyers tend to shy away from this.
Homeowners should be aware of these seven ways selling their house is going to cost them money. Most of these costs will need to be paid out of pocket and will only be returned once the house is sold.
Even with the house being sold a lot of the expenses that go into the sale will not be paid back in full. Even though it does cost to sell a house, it can be worth it if the house is no longer a good fit for the homeowner.