In the current Des Moines seller market, home prices are on the rise. It can be a great time to sell, but be ready for what the hidden costs of selling are.
Depending on your price range, according to Zillow Research, selling a house can run anywhere from $10,000 to $55,000. Nationally, the average is nearly $15,200.
If you are ready to sell, here are some of costs for which you need to plan to maximize your time and profits. We can walk through this process together, so you know what proceeds you can expect out of your current house.
To sell, you will have two different sets of expenses: expenses to prepare your home for sale, and expenses taken out of your proceeds at the closing cost table.
Preparing your Home For Sale
Even in today’s hot market, don’t assume you can just put up a “For Sale” sign and sell for top dollar. You will want to make your house look inviting. Spending time preparing your house will accomplish two objectives: helping your house sell faster and getting you ready to move.
Some things that sellers do before listing their house are carpet cleaning, painting, decluttering, tidying up the outside, finishing up outstanding projects, and power washing the exterior. However, each home is different. Be prepared; you will most likely need to spend some money on these items before listing your house for sale, and those costs can vary widely from home to home.
I can walk through your home, even months beforehand, and give you a list of items you’ll need to complete to net the most money for your home. In addition, if you do need to hire vendors to help you out, feel free to check out my vendor list for suggestions at Nora’s Vendor List
Expenses Paid from Proceeds at Closing
Before you list your home for sale, you will want to plan for the expenses that are also taken out of your proceeds at the closing table. The good news is that these expenses are only charged to you if you make it to closing. The bad news, however, is that you will have to pay them to ensure the sale goes through.
Want to know your estimated net proceeds to help you decide whether to sell or not? Contact me today, and I can work through the numbers with you.
One caveat: Costs do vary from transaction to transaction, and they will also vary depending on how you sell your home (whether you sell with a REALTOR®, or by yourself using an attorney, etc).
Some of the most common costs include:
- Abstracting: In Iowa, every property should have an abstract, which documents the history of your property. This is a thick stack of paper, legal size, that you will need to turn in as soon as you have an accepted offer on your property (if not sooner). The abstract will then need to be updated, and this will cost about $500-$600.
- Property Taxes: In Iowa, we pay property taxes twice a year (March and September). At any point, our taxes are 9-15 months in arrears. In other words, you have paid your property taxes through a period of time that is 9-15 months in the past. In order to close on your house, you will take an amount out of your proceeds to catch the taxes up to the closing date, and credit this to your buyer.
- Attorney Fees: Attorneys will need to prepare paperwork such as the deeds. Estimate $150 to cover these fees.
- Termite Inspection: In the Des Moines area, it’s customary for the seller to pay for the termite inspection. Your buyer’s lender will require a termite inspection to be completed and submitted. This inspection will cost about $50-$100. Please note: If termites are found, treatment can then cost about $800-$1,000.
- Transfer Taxes: This is payable to the county where the home is, and is a tax on the sales price of the home. The county charges $1.60 per $1,000 on the purchase price after the first $500 of the price. As an example, if your home is sold for $250,000, then the transfer tax will be 249.5 * $1.60, or $399.20.
- Settlement Fees: These are fees relating to document preparation and administration. They vary from brokerage to brokerage, but can be anywhere from $200 to $500.
- Commissions to Agents: If you do use a REALTOR®, or are willing to pay a buyer’s agent, you can expect to pay a certain percentage of the purchase price at closing. This fee is typically split among the agents, and each agent will also be responsible for paying their brokerage.
- Buyer Concessions: These are costs that buyers may ask you to cover. Depending on the purchase price, or the buyers’ situation, they may ask you to provide a home warranty (about $400 – $650), and/or give them a credit for their closing costs (about $2,000 to $3,000). These items are negotiable.
- Paying off Mortgage: If you have any mortgages against your house, these will be paid off from your proceeds at the closing table as well.
Anything left from the sale price of your home will be your net proceeds. These are typically delivered to you as a check from the closing company.
If you made it this far without panicking about all the costs, great job! I’m happy to sit down with you and discuss your particular situation in more detail. Just let me know!