The Cost of Selling Your House

Just because you list your home for $200,000 dollars doesn't mean you will put $200,000 in your pocket. The fact is that selling your home will cost you a pretty penny. It never ceases to amaze me when I talk to a home seller who believes they will receive the asking price for their home.

Selling your home will cost you dearly. Let's look at the figures. Let's assume that you are listing your home for $200,000 dollars with a real estate agent. The first thing most sellers don't realize is that they will generally sell their home for 95% of the asking price. So now the seller is down to $190,000 dollars. The second thing most sellers don't understand is that they will be asked to pay a portion of the closing cost. This figure is negotiable but usually ranges between 1 to 3 percent of the selling price. So we will assume 2 percent. So now the seller is down to $186,200 dollars. Sometimes the seller will be asked to provide a home warranty which usually cost around $600 dollars.

In addition to the home warranty the seller will be asked to make repairs on the house. This obviously could vary greatly. Typically the amount will be around $2,000 dollars. So now the seller is down to $183,600 dollars. So what other cost could be included? Well in order to sell your home you will need to fix it up. This means landscaping and paint. These two items could cost $1,000 to $10,000 dollars. So for our example we will estimate $3,000 dollars. So now we are down to $180,000 dollars. Of course if you have already moved out of your house then you are paying two house payments. This could get expensive. For our example we will assume the seller is still in the home. The last big cost to selling your home is the agent's fee. This is between 5% and 7% of the selling price. So for our example we will use 6%. Therefore the grand total the seller will receive at closing will be $168,600 dollars. That is a big difference!

So why don't more home sellers consider alternative ways to sell their homes? I don't know. I always recommend trying to sell your home to a home investor. Investors are in the business of buying homes. An investor typically doesn't care what the home looks like. They will be able to pay cash and close quickly. Best of all there is no agent involved. Think about it. Before I showed you the cost of selling your home using an agent you would have laughed at an offer of $168,000 dollars. But knowing what you know now, what if an investor offered you $175,000 dollars. Would you consider this offer? Before you sell your home think about the true cost involved and then consider selling to an investor.

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