How much will it cost to sell your home?

Monday, February 14, 2022

Prepare For The Costs, But Focus On Your Net

The first question some home sellers ask an agent is how much it will cost them to sell their home. What they're really interested in, of course, is finding out how much money they'll have after selling costs are paid. If you're ready to sell, here are some costs you should plan for.

Fixing Up To Sell
Just before a home sale is not the time to add on or remodel the kitchen or make other major improvements. With most major improvements, the pay-back may not cover the investment, so keep pre-sale changes on a reasonable budget.

Now is a great time to put your home in the best condition possible, making it fresh, clean and neat. You may have to purchase paint, soap, wax, putty, tiling, carpentry and plumbing supplies. If you're not handy or you lack time, you might also have to pay for the services of professionals to go with those supplies-plumbers, yard maintenance and cleaning help, carpenters, etc.

Closing Costs
Market conditions and local customs often determine whether the buyer or seller is responsible for paying certain types of closing costs. Those that may end up in the seller's column include:

• Mortgage prepayment penalty:Not many lenders charge for prepayment these days, but yours could be the exception. Check your mortgage paperwork.
• Termite inspection fee.In many states, a termite inspections required to sell a home.
• Loan points:Buyer or seller may pay some or all of the points on the buyer's loan. Sometimes, buyers negotiate to have sellers pay the points. (A point is 1% of the loan amount.) Often the seller's cost is off-set by a higher purchase price; in effect, the points are financed by the buyer's loan.
• Tax proration:Payment of taxes for the portion of the year during which the seller owned the property.
• Revenue taxes:Depending on local practices, may include city, county and/or state tax-stamp charges, based on the home sale price.
• Recording fees:For recording the transferred deed, mortgage status and various releases.
• Real estate commissions:The brokerage fee, typically based on a percentage of the sale price of a home.
• Legal fees:For an attorney's advice and representation, if necessary.

Capital Gains Taxes
Current laws allows married couples to exclude from taxation up to $500,000 of capital gains from the sale of a home ($250,000 for singles), providing the sellers have owned and lived in the home for two of the previous five years. The exclusion can be taken once every two years. (Consult a tax advisor for further details and to determine what your capital gain will be.) We'd be happy to take a look at your particular situation and help estimate what your selling costs would be. Even better, we'll help you calculate how much money you'll net on the sale!

Please call me right away to get started at 860-494-3046 or email me at matt@mattsellsrealestate.com