13 hidden costs of selling a house that no one told you about

13 hidden costs of selling a house that no one told you about

Once you’ve decided to sell your home, you might think that all you have to do is list it for the price you want. However, it is not uncommon for homeowners to spend thousands of dollars when selling their homes.

Knowing these “hidden costs” can help you strengthen your bank account as you decide to sell and price your property.
Here are some of these elusive expenses that you should know about.
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1. Real Estate Commission

could be what you would expect, but the amount is where the shock comes in. Real estate commissions, paid to both real estate agents, are between 5 and 6 percent of the home’s sale price.

 

You’ll pay agents if your home sells for $200,000 or up to $12,000. There may be opportunities to reduce this cost, but it can be challenging.

2. House staging costs

Staging your home is a big process. It often involves removing as much clutter as possible and arranging the home in the most attractive way possible to encourage buyers to see themselves in that space.

 

If you hire a professional, the average cost of home screening ranges from $750 to $2,800. You can do it yourself if you have the right furniture to get the best results. However, staging takes skill and experience to get right.

13 hidden costs of selling a house that no one told you about

3. Loan payment fee

The amount owed on your existing mortgage must be paid in full at the time of sale. Usually, the amount received for the sale covers most of these costs.

However, prorated interest on a mortgage can be a factor. The lender may stipulate that you must pay a prepayment penalty if you pay off the mortgage within a certain time frame of the home purchase.

Check with your lender if there is a prepayment penalty, as it can be in the thousands of dollars.

4. Title insurance premium

Title insurance serves as a safeguard against potential claims on your property. It is customary for the seller to cover the cost of the buyer’s title insurance. This type of insurance protects the buyer in case of any concerns or issues regarding the property’s title, ensuring that any potential losses are mitigated.

5. Property tax

You may owe real estate taxes for your time in your home. In many states, these are paid in arrears, which means after time has passed.

If you paid taxes for the previous six months in January but sold your home in March, you may owe property taxes for three months (January through March) of the current year.

In short, what you pay is based on how long you’ve lived in the home

6. House cleaning and preparation

To maximize the potential sale price of your home, it is advisable to undertake certain preparations. This entails various tasks such as carpet cleaning, power washing the driveway, investing in exterior updates, tree trimming, and even applying a fresh coat of paint to the interior. Even if you choose to handle these tasks independently, it is essential to consider the expenses associated with acquiring materials and supplies for these upgrades. The ultimate goal is that the money invested in these home improvements will yield a higher return when selling the property.

7. Professional photos

The photos you use in your home listing are one of your most powerful marketing tools. Ensuring they are done well and showcasing your home is critical to getting people to view the property.

 

That’s why paying a professional for this service is usually best instead of doing it yourself or using an agent. Costs depend on size and location but can range from $500 to $1,000.

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8. Water and electricity

Until the day the home is officially handed over to the new homeowners, you are responsible for covering the costs associated with your services. This might not be apparent initially, but it can lead to additional expenses, even if you no longer reside there. One important aspect to consider is the maintenance of essential utilities. For instance, keeping the air conditioning and heating systems running, even during vacancy periods, is advisable. Additionally, you may be required to cover the expenses for water, sewer, and electricity for the remaining days leading up to the transfer of ownership.

9. Capital gains tax

Capital gains tax is a charge on the difference between the amount you paid to buy your home and the amount you sold it for, minus any improvements you made.

 

Many exemptions for this tax can reduce the actual amount paid. Before you sell your home, it’s worth talking to a tax professional.

10. HOA Fees

Then you need to consider homeowner association fees. You may owe all or part of these fees for the month you leave.

This monthly salary is the same one you already pay to help cover maintenance costs.

11. Attorney's fees

Lawyers usually write sales contracts and other terms and conditions of sales. Their costs are often included in your real estate agent’s fee and are another unexpected expense of selling a home.

It’s common to spend $100-$200 on attorney fees, especially if you’re not using a real estate agent.

Real Estate Commission

12. Radon gas test

Sometimes the seller may be required to complete a radon gas test. It helps ensure the house is free of this gas, often indicating improper ventilation.

 

This type of test varies by location, with home versions costing up to $250 and professional ones costing $150 to $800.”

13. Additional Seller Privileges

If you agree to seller concessions, additional costs may be associated with selling the home.

The seller may agree to pay a portion of the buyer’s closing costs as part of the transaction. It can be part of your negotiations with the buyer to reach an agreement. Also, note that there may be repairs or upgrades that your buyer has worked into the sales contract.

For example, you might agree to lower the home’s overall price to cover fixing a broken sewer pipe. Instead of doing the work yourself, you’ve reduced what the buyer has to pay you so they can make the repairs later.

Conclusion

Selling your home comes with many hidden costs. In addition to these costs of selling a home, there are several additional costs to consider.

These costs include moving into a new home, paying movers, using a short-term storage unit, and buying new furniture.

Knowing what to expect can help you eliminate financial stress and avoid these expenses so they don’t surprise you.

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