Selling a home can be confusing and will come with some costs associated with the sale
Selling a home can be an expensive process. There are a number of factors that will come into play when you sell your home such as the cost of the real estate agent, taxes, and any other fees. In addition to these costs, there will also be closing costs associated with the sale like legal fees and title insurance.
Most Costs with selling a home and Closing costs associated with the sale of a property are usually paid by the buyer. The seller may be able to negotiate who pays for these costs in the contract. There will also be other costs such as potential legal fees and title insurance that will need to be considered.
Scott from Scottschulte.com has been helping sellers navigate the home selling process since 2005.
Scott has been in the real estate industry for over 16 years. He knows that the home selling process is not always an easy one, but he wants to help you find a way to make it as simple and straightforward as possible. Marketing your home and helping you find another home.
Selling a home is never an easy process.
However, with the right strategy and team in place, the selling process can be less stressful and more straightforward. Marketing your home to potential buyers and helping you find another home is my goal as your real estate professional.
Arizona has some pretty simple aspects when it comes to closing costs and professional fees, and the state is very welcoming to buyers. The most common aspect of closing costs is that the seller may be asked to assist with some of them, which they would not be asked to do in a sellers market. This is a common practice in many states so you should not be too surprised by this request. Some other basic aspects is the buyers inspection and sellers response.
Always budget for Repairs
The home inspector will find something that needs attention, but the main focus for an inspector is making sure they buyer is not buying a financial time bomb. Somethings that may be worth walking away from a home when the inspector finds major roof damage, or major structure/foundation issues.
As a seller and you may know the home needs work make sure you expect to make repairs, or credit the buyer some cash at close so they have the resources to make the repairs themselves. A sellers market may be more forgiving and buyers will be more willing to take on the expense themselves.
An important step in buying a home is getting it inspected. The inspector will look for major problems like termites, roof damage, leaky water heaters, and A/C units that are struggling to cool the home.
These are typically the most common major repairs found on a house. As a seller, you can check these items and know what to expect with the inspection. Or make an effort to repair/replace some items prior to listing. I would discuss this with an agent first.
Here is a list of the fees and expenses incurred in our recent sale:
Understanding the fees that come with a recent transaction is important. Understanding these costs can help consumers avoid costly mistakes and protect themselves against unexpected expenses.
Selling a home costs break down:
The process of selling a home is more than just listing your property and hoping for the best. It's about understanding your property’s unique features, pricing it right and marketing it intelligently.
The process of selling a home is more complex than just listing it, waiting for buyers to find you, and hoping for the best. It's about understanding your property’s unique features and selling it in a way that will appeal to buyers.
Selling a home costs will be different for almost every transaction, but this will give you a general idea what to expect.
$1,520 Seller credit to buyer for repairs
In a recent deal, a buyer entered into an agreement with the seller for the purchase of their home and during the inspection process, it was discovered that some repairs were needed. The seller offered to credit the buyer $1520 in lieu of doing any repairs to the house.
This helps the seller not having to do the repair and this helps the buyer by giving him the resources to do the repair to his standards after the home is theirs.
$570 Unpaid portion of your taxes
Some loan servicers pay the property taxes for you, some owners will pay them when they are due. This was the sellers portion of unpaid taxes, Buyer will start paying from the date purchased. Unless the home was purchased in a motivated seller/distressed sale, then sometimes you will see the buyer catch these up. This number depends on what you pay per year and if you are behind on payments.
$1,750 ALTA Homeowners title insurance policy
The ALTA Homeowners Title Insurance is the perfect addition to your homeowners insurance. The policy protects you in the event of a title defect or dispute. You also get coverage for the cost of loss due to natural disasters, as well as protection for losses incurred from vandalism, theft and other perils that come with home ownership.
$525 Escrow fees to pay title/escrow company for services
Escrow companies are a necessity for any home purchase or sale. The escrow company, in most transactions, is the trusted third party that holds the funds and checks that all contingencies have been met before releasing them. Escrow fees vary by transaction type, and can be as low as $500 to as high as $5,000+. The fee will depend on complexity of your transaction and the price of the home.
$200 title insurance processing fee from title company AZ
The title company will charge a processing fee for each document that they need to review. This is usually $200, but may vary depending on the document and type of transaction.
$9,200 Buyers Closing Costs Paid by Buyer (rare in a sellers market otherwise very common)
There is a lot of misinformation in the real estate industry, especially when it comes to buying a home. If you are not well-versed in the process, you might find yourself on the losing end.
One of these common misconceptions is that buyers always pay closing costs when purchasing a home. This may have been true in years past, but today many buyers are able to secure loans with little or no closing costs, and low down depending on credit.
$20,100 professional fees to pay real estate commissions
The commission is the fee an agent charges when they help you buy or sell a home. The commission is generally paid by the Seller.
The seller's agent is paid a commission for the sale of property, and they pass some of that on to the buyer's agent. The commission percentage varies in different price ranges and regions, but it is usually between 5.5% - 8%, depending on whether it is a residential or commercial property.
Thinking About Selling in the future?
If you're considering buying or selling a home, it can be helpful to know the current value of your home. Scott, a real estate professional can evaluate the property and give an estimate of its range of value.
But if you're not ready to meet with a real estate agent just yet, there are other ways to get an estimate without spending any money. For instance, you could check out our free home value tool below:
Market Report from ScottSchulte.com is a great way to keep track of recent sales and active homes in your neighborhood with similar features.
The real estate market is always changing. It's important to stay on top of current trends and know what you're up against. There are many factors that go into the success of a home sale. One of these factors is their understanding of the current real estate market as a home owner and what you are up against. This includes everything from knowing what different mortgage lending options are available to knowing about recent changes in home prices, interest rates, and more.
The Market Report from ScottSchulte.com is an easy-to-use, interactive tool that offers a visual representation of the most recent sales and active listings in your neighborhood with similar features. Would you like to receive an email every week or month?
Pricing your house:
This is an important step in the process since homebuyers are sensitive to price when shopping for homes. Homes priced 10% or more above market value will struggle to find buyers, while homes priced at or below market value are likely to sell quickly.
This may seem like common sense but there are many people who don't know this information so they overprice their homes by as much as 30%.
It's important that you have a good handle on the prices in your area, the best way to keep track is using the Market Reports and Home Value Tools.
When you are close to selling your home, a professional walk-through can help you understand what upgrades, updates, and features have helped the value of your home. A price analysis will also allow you to see how competitive the asking price is to other local homes with similar features and updates.
Don’t use Online Valuation Tools to Price Your Home
Online valuation tools are not very accurate and should not be used to price your home. The accuracy depends on how the information is entered into the online tool. It is best to use an in-person, professional evaluation of your property before you list it for sale.
The most widely used online valuation tools are Zillow and Redfin. They give you a rough idea of what your house may be worth, but they are far from perfect in assessing the value of any given property. The main reason is they cannot see into your home and see updates, upgrades, and condition of the home.
These tools rely heavily on data that is entered by consumers, which means there could be errors or inconsistencies in the data inputted about a property that would lead to inaccurate pricing estimates.
Another limitation of these tools is using them to determine whether or not a property will appraise for its list price.
These tools are great to keep an eye on the market, but not to price your home.
Getting a real estate appraisal sometimes helps, if you have a unique situation.
$450 to $3,500 depending on size and location. Average is probably closer to the $600 range and if you are up in the high country in the woods expect over $900.
A real estate appraisal is a professional opinion of the value of a property. Appraisers are typically experts in the field of housing values, and they work for themselves or for an appraisal company.
Appraisers must go through extensive training, and real life experience to understand the nuances of the market and how to best form their opinions.
When a homeowner has a unique set of circumstances, they may need to hire an appraiser to do the property appraisal. An appraiser is an expert who values, assesses, and determines the value of property.
There are few tools more important in the world of real estate than the appraisal. Appraisals are often an integral part of a home sale. Especially if the buyer is financing the home.
Photo by Tamil King
Photo by Ksenia Chernaya