WHAT COSTS COME WITH SELLING A HOME

Selling a home typically involves several costs that can add up, so it’s essential to budget for these to avoid surprises. Here’s a breakdown of the common expenses:

1. Real Estate Agent Commission

• Typically, this is the largest cost, averaging around 7% on the first $100,000 and 2.5% on the balance of the home’s sale price, split between the seller’s and buyer’s agents. This fee is negotiable but varies by market.

2. Home Staging and Preparation

• Preparing your home for sale may include minor repairs, painting, landscaping, or professional staging to make the property more appealing. Costs can range from a few hundred to a few thousand dollars depending on the home’s condition.

3. Home Inspection and Repairs

• Some sellers opt to pay for a pre-inspection to identify and address issues before listing. Also, after the buyer’s inspection, they may request repairs or credits. Depending on the findings, this can add several hundred to thousands of dollars.

4. Closing Costs

• These can include title insurance, transfer taxes, and escrow fees, totaling 1-3% of the sale price. Sellers may also be asked to cover some buyer closing costs as part of negotiations.

5. Mortgage Payoff and Potential Prepayment Penalty

• Any remaining balance on your mortgage must be paid off. Some loans have prepayment penalties, so check with your lender to see if this applies.

6. Capital Gains Taxes (if applicable)

• If you profit from the sale, you may owe capital gains taxes. However, if the home was your primary residence, there are exclusions ($250,000 for individuals and $500,000 for married couples).

7. Strata Fees and Prorated Property Taxes

• If you live in a community with a strata, you may need to pay fees upon transfer. Property taxes are usually prorated to the date of closing, so any taxes owed up to that date are the seller’s responsibility.

8. Moving Costs

• Don’t forget to budget for moving, whether hiring professional movers or renting a truck. Moving costs vary depending on distance, volume, and services required.