The Hidden Costs of Selling A Home

Selling a home comes with a lot of costs – particularly if you’re planning on selling it without the help of a real estate agent. You’ll have to pay for many things out of pocket, including:

• Advertising the home. While there are many free options online to advertise your home, you should also consider putting it in the local paper and in other venues. You’ll also need to advertise the open house, including signs for the front yard and fliers.

• Upgrades and updates. Before you even consider selling a home, you have to make upgrades that will make it appealing to potential buyers. If the walls aren’t white, paint them – and even if they are white, a fresh coat of paint can look more attractive. You’ll also need to get the carpets cleaned or even replaced, depending on their condition. You can reduce these costs by painting yourself and renting a carpet cleaner.

• Your mortgage and upkeep. Many homes sit on the market for a month or more. While your home is in the process of being sold, you’ll still have to pay the mortgage and any upkeep that arises (keeping the lawn mowed or the heat turned on to keep the pipes from freezing, for example). While you can occupy the home while it’s being sold, this makes open houses more tricky. It can also be difficult to coordinate the closing if you’re still occupying the house.

• Real estate agent commission. Even if you don’t have a real estate agent, you may still wind up paying for the buyer’s agent’s commission, which can be 3% or higher. Although this doesn’t come directly out of pocket, it reduces the amount of money that you’ll take home after the sale.

Do your homework before selling a home to make sure you can afford any costs that might come up. You may find that it is easier to use an agent or sell to someone who will pay cash for your home, saving you time and money.