Closing costs are not the only cost of house selling. The process is complex and involves many moving parts. While you might be prepared for property taxes, real estate agent commissions and other expenses, it's best to prepare for every possible cost.
To make sure you budget accurately, here are some additional costs sellers typically pay:
Curb appeal can attract buyers both in person and online, so landscape maintenance is an important investment. This could include mulching shrubs, planting flowers, mowing the lawn, removing weeds and debris. While you can do yardwork yourself, new plants and supplies can add up quickly.
It usually takes a couple of weeks to move from your current residence to your new one. You may have already purchased two houses and paid the ownership cost separately. This means you'll have to pay for storage space, transportation and other moving costs during that period.
If the transition is long enough, you may also need to budget for supplemental housing, such as a short-term rental or hotel room.
When someone sells a property for a higher amount than the original purchase price, the IRS considers the amount as a capital gain. Capital gains tax are either short-term or long-term, depending on how long you've owned the property before selling it.
It's common to incur additional expense to win over a hesitant buyer. Concessions are a valuable negotiation tool for both buyers and sellers, and can help keep a real estate transaction smooth and simple. For example, the cost of the home inspection or additional processing fees are covered by a seller concession.
You'll likely use the proceeds from your home sale to pay off your mortgage, but you may actually owe more than the payoff amount on your statement. In this case, you'll have to factor prorated accrued interest to the total balance. There might also be a prepayment penalty to budget for. Consulting your lender and going over the details of your contract will help you prepare for these costs.
The cost to sell a home might seem daunting, but the more you prepare for these additional expenses, the easier the process will be.
Lana Harris is a Chicago native who is a second-generation real estate professional. She was introduced to real estate at a very young age while attending open houses with her mother who is a broker. She honed her skills assisting in property searches (back in the thick, Multiple Listing Service book days,) and using map reading skills to help plan property tour sequencing. Lana’s love of working with people and delivering strong customer service led her to the retail sector, where she developed her management skills at MC Sports, Ann Taylor, and Adidas. She and her husband moved to Utah in 2008 to enjoy the natural beauty of the mountains, and she began her real estate career here in 2015. Most recently, she was a VP of sales for a large team; she thrives on challenges and is determined to overcome obstacles to achieve results for her clients. Lana and her husband enjoy their three large dogs, skiing, camping and paddleboarding.
