When you're selling a home, you think about the amount of equity in the property and profit margin from the sale. The profit may dwindle with the costs associated with the sale of a home. Since most people use the proceeds of the sale of a home to purchase another residence, it's vital to calculate the cost of selling a home.
Instructions
1. Expect to pay 4 to 6 percent commission to the listing real estate agent. Discuss the commission with the agent and try to negotiate the fee by adjusting the services from the agent. Understand that some agents will accept a lower fee in a slow market.
2. Consider transfer taxes and property taxes, as well as legal fees, that are associated with the closing. Calculate 2 to 4 percent of the final sale price. Check the state laws regarding prepaid taxes and home insurance escrow, which may result in a refund.
3. Contact the holder of the current mortgage and ask about pre-payment penalties for paying off the mortgage early (following the sale of the home). Ask the lender for a payoff statement to verify the figures. Include any service fees as a tax deduction.
4. Plan to pay for a home inspection, which is generally required by a buyer's lender. Arrange for the home inspection prior to listing the property to resolve potential problems identified.
5. Calculate the cost of pre-listing repairs to the home. Get at least three estimates for necessary work. Maintain an itemized list of expenses for tax purposes.
6. Make a list of all cosmetic improvements completed before the property is listed. Include the costs for new paint, hardware, carpet and flooring and landscaping. Consider the decreasing labor costs in the way of "sweat equity" to minimize cash outlay.
7. Look at relocation expenses as part of the cost of selling the home. Think about moving fees, storage costs, the purchase of new appliances, cosmetic updates to the new address, transfer fees and deposits for services and utilities.
Tags: sale home, associated with, cost selling, cost selling home, home inspection
