A recent shortage of homes for sale in Orlando, FL gives sellers an advantage in the current housing market. However, many sellers don’t that a real estate transaction will cost them thousands of dollars.
Paying a real estate commission and other associated costs can total up to 10% of the sale price of the home. Realtor commissions are negotiable and other fees can fluctuate slightly with the real estate market. Sellers should be prepared to pay their fair share of the numerous costs involved in selling a home.
Following is a general overview of the various costs to sell a house.
Real Estate Commissions
The commission paid to a real estate agent or agent is by far the biggest fee a seller will pay. The typical real estate commission paid will usually total about 5 to 6 percent, usually divided among 2 real estate agents unless only one agent was used in the transaction. That means if you sell your home for $300,000 you could end up paying up to $18,000.00 in commissions. Typically the commission is split between the buyer’s agent and the listing agent and is almost always paid by the seller.
The good news is that real estate commissions are negotiable [especially in a hot market] and this is something that you should discuss with your real estate agent before you sign the listing agreement.
Some homeowners will try to sell their homes on their own to avoid paying real estate commissions. This usually isn’t a good idea. Real estate agents have a lot of responsibilities in a real estate transaction including:
- Showing the home to perspective buyers
- Negotiating price
- Reviewing the real estate contract
- Scheduling inspections
- Walking you through closing
So be prepared to do all of these things yourself if you decide to sell on your own.
House Repairs
If you want to sell your home for top dollar, make sure your home looks as good as possible before showing it to potential buyers. There are quite a few things you can do to enhance your home’s appearance without spending a lot of money. Some fresh paint and a bit of landscaping can go a long way. You should also make sure that the inside of the home is clean, de-cluttered and all the mechanical components are working properly.
If your home needs some updating in the kitchen and bathrooms, it might be investing if your budget allows for it. Depending on the surrounding homes in the area, an updated kitchen and bathrooms can raise the value of a home significantly.
If the home inspector [hired by the buyer] discovers there are problems with the house like a leaky roof or outdated plumbing, you’ll most likely have to make those repairs to close the deal.
Ordering A Home Inspection
As a seller, ordering a home inspection on your home is up to you, and it usually costs around 300-400 dollars. Some homeowners are willing to make this investment because they want to identify and fix any potential problems with the home before the buyer’s inspection is performed.
Ask your Orlando real estate agent whether or not they recommend you order your inspection. As the homeowner, you are obligated to disclose any material defects to the buyer if not corrected.
Staging Your Home
Unless you know what you’re doing, I recommend hiring a professional staging company to stage the home. A good home-stager can do amazing things with furniture and some simple home accessories. The best part is that you don’t have to buy anything. They have their furniture and decorations which they will come and pick up once you sell the home.
Retail buyers should be able to envision what a house can look like at its full potential when they walkthrough. In addition to some fresh paint and updating, it might be worth the investment of staging the home. If you’re living in the home, be sure it isn’t cluttered with too much furniture or junk. You should also make a habit of keeping the home spotless while it’s being marketed. This way you’ll be ready for any surprise showings.
Staging is a great tool for selling homes. We’ve been buying and selling fixer-upper homes in Orlando for a very long time and I can tell you from experience that a properly staged home will sell faster than one that isn’t staged every time!
Professional home stagers usually charge according to the home’s size and how many rooms you want to have staged. For example, if I’m selling a 4 bedroom home, I may only have 1 or 2 of the bedrooms staged and leave the rest of them empty.
Paying Utilities
If you don’t reside in the home you’re selling, be sure to keep the utilities on while it’s being sold. It can be a big turn-off for potential buyers to walk through a home with no ac or lights. It can also cause the buyer to wonder if everything’s working properly.
Paying off the Mortgage
The first thing that gets paid from the sale of your home is the remaining amount on your mortgage. Unless it’s a short sale transaction, Your mortgage payoff should be less than what your sale price is.
If you’re selling one house and buying another? Make sure to find out how much you can afford before buying.
Closing costs
Depending on what you’re able to negotiate, closing costs are generally the responsibility of the buyer. If you’re selling your home in a buyers market, you may be asked to kick in for closing costs as well.
These fees include homeowners association costs, property taxes, attorney fees, transfer taxes, title insurance, etc. Altogether, closing costs can range from between 2% to 4% of the sale price.
Capital Gains Tax
If you sell a home for more than you paid for it, it’s considered a capital gain and may need to report on your federal tax return. However, many homeowners are eligible to exclude up to 250k of capital gain and 500k for married couples who file jointly.
