When it’s time to sell you home, you want to get every last penny out of it! Because you are most likely putting that money back into a new home, it’s important to be able to expect and budget for all of the expenses you’ll encounter along the way. We’ve made a list of the biggest and most common ones you will most likely see when you sell your home:
Real Estate Commissions – When a seller uses a real estate agent to sell a home, he or she can expect to pay a commission – usually about 3% of the home’s selling price – to the agent. The seller also typically pays for the buyer’s real estate agent commission – again, generally 3% of the selling price – as well. While this is standard procedure in paying for the expertise and benefits that an agent provides, if you’re not ready for it, these amounts can feel like a hit on your profit.
Closing Costs – Sellers can expect to pay closing costs at around 2-5% of the home’s selling price. Closing costs may include line items like transfer fees and escrow expenses. Oftentimes a buyer, especially a first-time homebuyer, will also ask for the seller’s help in paying closing costs on the home. This amount or percentage should be settled on during negotiations and should not be unexpected at the time of closing.
Home Warranty for the Buyer – In addition to closing costs, buyers may ask you to pay for a home warranty to cover the home for the upcoming one to two years. Coverage usually starts around $500 and again, this should be a cost that is negotiated upfront and not something that shows up at closing.
Capital Gains Taxes – Generally most sellers will not be taxed on the sale of their home. For sellers filing a single tax return, any profit over $250,000 may be taxed. For married sellers filing jointly, a profit over $500,000 can be taxed. In order to qualify for these exemptions, the sellers must have lived in the home for at least two of the previous five years.
Moving Costs – Lastly, don’t forget or underestimate the cost of moving! You’ll need to decide if you are moving yourself or hiring movers and then get estimates on the amount of money you’ll expect to pay for either! Shop around for the best prices but make sure that your final choice is reputable and experienced.