How Much Does it Cost to Sell a Home?

Usually, it’s the buyers that complain about real estate being expensive. But many sellers often find that selling a property can actually cost them a great deal out of pocket. Even if you have a lot of equity in your home, selling a property can take away a lot of the profit you hoped to make. That’s why selling a home for cash to cash investors can be much more of a sound financial decision than it seems.

Below, we review some of the expenses you might experience if you are trying to sell your property in the Sacramento and Northern California real estate market.

The Actual Costs of Selling a Home

• Listing Agent Fees – Some of the most expensive fees you may experience are those of the listing agent (which are also shared with the buyer’s agent). On average, listing agents are paid a commission of roughly 5% to 7%. For a home in Folsom that is sold for $400,000, for example, you may expect to pay your listing agent $24,000 on the sale price.
• Closing Costs – It’s on the buyer to pay most of the closing cost fees, but sellers can expect to pay as much as 2% of their home’s sale price on closing costs, and may pay more if the buyer could use a bit of assistance as part of their negotiation. That amounts to about $8,000 in various fees on a $400,000 home.
• Repair Fees – If you have any repairs you need to make, expect to pay for them up front. Even in a hot market, like some areas around Sacramento and Placer County, home buyers are usually unwilling to pay for a home that is in need of significant repairs. So if there are any fixes that need to happen to make your home ready for sale, expect to pay for those out of pocket.
• Maintenance and Cleaning – From carpet cleaning to new paint to landscaping, you’ll need to pay to make sure your home is presentable. Even a well cared for home can require a lot of cleaning now and smaller maintenance items now and again. If your home also remains on the market for a long time, you may have to repeat these payments frequently.
• Warranties and Extra Insurance – Although not relevant for all homeowners, some are required to get vacancy insurance if they are planning to be out of the home, or warranties for buyers.

These are only scratching the surface. Other expenses you may need to cover include paying for staging, which can cost anywhere from $250 to $3000 or more, mortgage payments if you buy your new home before selling the current home, utilities (if you vacate the home before it is sold), and more. You may even need to pay for moving or trash expenses, if you have a lot of items that you do not plan to take with you.

How Much is All Of This Together?

With all of these factors at play, the final value of the home tends to be much less than it seems once the home is sold. Using the $400,000 home example (the average cost for a home in Folsom), a homeowner can expect to pay anywhere from $35,000 to $45,000 just in various fees. On a $250,000 home, like those in Citrus Heights or Cameron Park, the number can still be about $20,000 or more.

And what if your home is also in “poor” condition, due to age or disrepair? The costs could be as much as $50,000 to $75,000 just to repair the home and make it ready for purchase.

That’s why, selling for a “discount” to a cash buyer is not as much of a loss as it seems. There are so many fees associated with selling a home, that you already lose a substantial sum of your final sales price. With cash buyers, you can sell your home fast, and just walk away.

If you’re interested in selling your home for cash and closing within 7 days, call Homestead Group today.