Oftentimes, when people decide between hiring a real estate agent to sell their house or selling it themselves (For Sale By Owner), they consider the commission fees they’ll have to pay the agent for their work. However, while they might be focusing on that cost, they’re not stopping to consider all of the other costs involved in selling your house. In fact, it’s not uncommon for all of the combined costs to equal around ten percent of your home sale price.
What does it cost to sell your house in Charlotte, NC?
So if you’re planning on selling your residence in Charlotte, North Carolina, here are all of the potential costs that you’ll have to consider. Once you know what those will likely be, you’ll be able to figure out if it’s worth it to list your home on the open market.
First Phase of Costs: The Preparation Stage
Before you even list your home, you’re going to want to make sure it’s in the best possible condition in order to get potential buyers to become actual buyers. Chances are your home is going to need some help to adjust from the home that you have enjoyed living in, to a market ready “show home”. There are four basic areas where you’re going to want to consider spending some money in order to get everything in order.
You may have created the perfect home style for your life but that’s probably not going to work for your buyers. They’re going to want to be able to see their lives in your home or at least get a sense of what it might look like from a neutral perspective. That’s where a home staging company comes in. They’ll rearrange your home to make it as appealing as possible for the widest audience. That might mean rearranging the furniture. It might also mean bringing in new furniture. Depending on who you hire, the costs could be anywhere from $2,000 to $3,500. That’s a lot, but according to a National Association of Realtors (NAR) survey, 50 percent of sellers’ agents say a value increases in the sold home when effective staging is used.
When you’re getting your house in order to sell, that also means you have to get the exterior property squared away as well. You’ll want the curb appeal of your residence to be as high as possible to make a great first impression. That might include mowing the lawn, mulching, planting flowers, weeding, and any other number of landscaping requirements. You can do it all yourself but if you’re not inclined to have a green thumb, you’ll probably want to hire a landscaper to do it right. Depending on who you hire, that’s between a few hundred dollars and a few thousand.
Chances are, there’s something in your house that could be repaired or updated. It might have been easy for you to put off these fixes while you lived there, but any potential buyer is likely going to be put off by any damage or broken items they come across.
The easiest thing you can do is get a pre-inspection report, which will identify any potential damage or repair issues. From water damage to a leaky faucet, you’ll be able to assess each one and figure out how much it will cost to get it fixed.
Along with fixing anything that’s broken, you might want to decide if you’d like to make any upgrades or renovations to the home before selling in order to up its value. Of course, any improvement that will make a significant value-add will probably cost a lot of money. Chances are you probably don’t want to plunk down thousands of dollars to improve a kitchen you won’t be using very soon. On the other hand, if you’ve got the extra cash and want to really make an impact, consider whether or not a new backsplash or updated cabinets will improve your sale price.
Second Phase of Costs: The Negotiation Stage
You’ve listed your house and got it in order. Now the offers are starting to roll in. That’s great news, but it also means you’re going to have to consider a whole new round of costs before accepting that final offer.
Agent Commission Costs
The upside of using a real estate agent is that they do a lot of the legwork for you. They list and market your home listing, they arrange the open houses and tours, they prepare all the paperwork and handle the negotiations on your behalf. All of that is a great benefit, especially if you’re new to selling, but it doesn’t come for free.
The agents involved in the transaction (Listing Agent and the Buyers Agent) can often receive commissions in the range of five-to-seven percent of the final sale price. These fees are often negotiable and can be more or less in specific situations. For example, if your house sells for $400,000, that means the agent is going to take $20,00 to $28,000. That’s a big chunk, even if the sale price is much smaller than that. You could sell the home yourself but you would often still have to pay a commission for the buyer’s agent, which is typically half of that overall commission.
There is another option to consider if all of these costs start piling up too high. You can also ask for a competitive cash offer from a real estate investment company. Not only will you be able to sell your home quickly but you’ll avoid most of the costs noted in this article. This option can especially beneficial if there are any major concerns about your house or if you’re relocating outside of Charlotte, North Carolina.
Seller concessions are often a part of the home buying process, especially if the local housing market is tipped towards the buyers. It’s a way to make the property more enticing so buyers decide to close quickly. That could be the seller offering to split or cover inspection fees, processing fees, or title costs.
Buyers might also ask for concessions because they don’t have enough cash to cover the sale price and closing costs. They might even ask for concessions in a seller’s market if the home price is higher than expected. It’s hard to give a specific cost to concessions as each transaction is different, but it’s possible they could end up equaling one-to-two percent of the sale price on average.
Final Phase of Costs: The Deal Stage
Great news! The buyer has agreed to the terms and wants to buy your house. However, don’t go counting all your money just yet. There are still some costs that need to be considered.
There are many fees that combine to make closing costs on a real estate transaction, but they tend to be title insurance fees, loan payoff costs, prepayment penalties, unpaid HOA dues or transfer fees, transfer taxes, and any buyer concessions that have been agreed upon. Sellers usually end up paying around one-to-three percent of the sale price on closing costs. It will vary based on all the factors, but it’s still likely to be at least a couple thousand.
Transfer Tax Costs
Since you’re selling a home in North Carolina, there’s going to be what’s called a transfer tax on the transaction. This excise tax comes down to $1 for every $500 in value on the property. So if the home sells for $400,000, the transfer tax is $800. The seller is responsible for paying this tax to the state.
Mortgage Payoff Costs
If you still have a mortgage on the home you’re selling, you’re going to have to satisfy that loan with the lender before moving on. While you already knew you’d have to use some of the proceeds from your sale to pay off the existing balance, you also have to consider prorated interest on the loan. Additionally, your mortgage may come with a prepayment penalty for paying your loan off ahead of schedule (we know how that sounds). These fees are often two-to-four percent of the overall loan.