Do Sellers Pay Closing Costs? Everything You Need to Know About Home Selling Expenses
When you first purchased your home you likely spent about 2-5% on closing fees, unless you rolled them into your seller’s costs. Given how much purchasing a new home costs, you probably didn’t even notice the extra couple thousand. After all, there are numerous upfront costs to homeownership and it’s easy to get lost in the process. However, now that you are selling you are probably paying more attention to home selling expenses.
Everyone wants to maximize the profit they get out of their home sale. Whether you need to downsize, upgrade, or simply move for work you want the most out of your investment. Sellers need to understand that there are avoidable and unavoidable costs associated with selling. Here are just a few.
What Are Closing Costs?
Closing costs are the costs associated with selling your home at the end of the sale. Usually, the seller needs to pay 1-3% on these costs. These costs include:
- Attorney fees
- Property taxes
- Transfer tax
- Closing fee
- Recording fees
In essence, these are the legal and regulatory fees involved with selling your home. You also may need to check with your bank, because some have early repayment fees. This varies by lender and the type of original mortgage you secured.
Keep in mind, you may also end up paying some of your buyer’s closing costs. If you are selling in a buyer’s market, it is very common to pay “seller concessions.” There is a good chance that the buyer paid them when you originally bought your home too.
Sellers concessions involve paying part of the closing costs to encourage a buyer to complete the sale. There are a lot of costs to a buyer throughout the sale, so seller concessions help them out. In certain markets, it is almost standard for a buyer to offer this, so ask around to see if this would be expected. On conventional loans, buyers can ask for up to 9% in concessions. FHA and VA loan applicants can ask for 6% and 4%.
What Fees Are Required to Sell Your Home?
Outside of closing costs, there are other fees that you need to factor into your home sale. As mentioned above, your mortgage lender may charge an early repayment fee. This is something to ask your lender about. You will also need to pay agent commissions. Even if you choose to bypass getting your own agent, you will need to pay a commission to the buyer’s agent.
What Costs are Associated with Selling a Home?
In addition, you need to get your home ready for sale which requires many additional costs. If you are showing your home, you will need to pay staging costs. Even if you stage your own, you will need to pay storage costs to remove clutter from your home.
To enhance curb appeal, you will need to consider landscaping costs and possibly updating your entryway. This is just one of the many improvements you may need to make. Additionally, you will need to complete various maintenance tasks on your home. That annoying outlet you deal with, now you have to fix it to pass inspection. Old home with an old plumbing system or electrical wiring? You probably will need a professional to bring it up to code. The expenses add up quickly.
Can I Skip the Agent?
As mentioned, even if you choose to skip the agent, you will not completely get out of home selling expenses. You will still have to pay commission for the buyer’s agent and still be required to make repairs.
How Can I Save Money When Selling My Home?
Not happy about all of the home selling expenses that are going to cut into your profits? Or does the idea of extensive maintenance really frustrate you? You can skip all of the hassles when selling your home by selling for cash. Cash sales skip agent fees and don’t require you to make repairs. They also allow you to skip showing and staging your home. Instead, you get the cash almost right away and you can move onto the next chapter of your life.
If selling for cash is appealing, contact SellHouseFast today. One phone call is all it takes to find out how much you could sell your house for right now.