How Much Will it Cost to Sell My House?
Whatever reason you have for selling a house you own, you will have some options to consider. The traditional plan is to hire a Realtor®, get the house fixed up and ready for showings, list and market the property, and then wait for the best offer to come in from an interested buyer. Other home selling options may include going “for sale by owner” (selling on your own without the help of a real estate agent) or a direct home sale to a real estate investor. This last solution may be an all-cash deal or some other sort of financing arrangement between you and a private investor or home buying company.
The main differences between these most common options will be time, price and cost. A traditional home sale or “for sale by owner” will generally take longer to complete than a cash home sale to an investor. As for price, we’re talking about the final resale price of the property. You will likely get a much higher selling price when listing on the open market and working with a good real estate agent. Lastly, there is how much the home sale will cost you—both out-of-pocket expenses during the sale and closing costs that will be taken out of the final selling price before the money is wired to you.
We want to break down how much it will cost you to sell your house in the “traditional” way through a Realtor® compared to a direct cash home sale to a real estate investor.
In a standard real estate sale, the home seller can expect to pay around 8-10% of the final selling price in closing costs. That equates to $8,000-10,000 for every $100,000 in selling price. Which closing costs and fees are required will vary somewhat from state to state, but they generally include escrow fees, title transfer fees, real estate attorney fees and other fees involved in completing the transaction. In addition, the home seller traditionally pays the commissions for both their selling agent/broker and the buyer’s agent/broker. These commissions can account for up to 6% of the selling price to pay the real estate agents and brokers for their services.
On the flipside, working with a Realtor® and listing your home on the open market will typically result in a higher sales price. So, depending on how it all shakes out, the agent may essentially pay for him or herself with their service.
In most cases, some work will need to be done to get a house ready for sale. There may be repairs that need to be made or upgrades you want to make to increase the resale potential. There may also be cleaning and home staging involved to make your home present as nice as possible for marketing pictures, videos, virtual tours, open houses and showings. Most of these home prep expenses will be coming out of your pocket before the sale is completed. Again, they may sometimes pay for themselves if the house sells for a higher price than it would have without the improvements.
Ongoing Homeownership Expenses
One last cost factor you need to consider is what you will be paying until the house actually sells. Let’s say it takes you six months to complete your home sale. That time includes the home preparation, the marketing, the showings, the offers and negotiations, and of course the closing stage. This means six more months of mortgage payments, property taxes, homeowner’s insurance, HOA dues (if applicable), utilities and general upkeep. These basic homeownership expenses can certainly eat into your profit by the time you actually sell the house.
Cash Home Sale Costs
Now, let’s take a look at the other option of selling your house for cash to a real estate investor. What will it cost you? In general, the cash buyer will be covering any of the significant closing costs in this kind of deal. They will also be buying the property in as-is condition because they are already planning to fix it up as a rental or flip. In most cash home sale cases, you won’t be paying much (if any) out-of-pocket expenses.
In addition, cash home sales can be completed quickly because there are fewer complexities like mortgage loans and home buyer contingencies. The transaction is simplified and can be completed in a matter of weeks rather than months. Yes, you will get a lower selling price when making a cash deal with an investor. However, you will be saving money elsewhere.
We’re not saying that a cash home sale to PropertyLark is going to be your best solution. We’re just saying you will want to consider ALL your home selling options and crunch the numbers. You might be surprised at how it all adds up. In most cases, a traditional sale will still net you the most money in the end if you have the time and money to go through the full process. In other cases, a cash home sale may be a better solution. Only you can decide what’s best for you and your property.
If you would like to receive a fair cash offer from PropertyLark, please fill out the contact form on the right. We can also help you explore other home selling and financing solutions beyond a simple cash sale. Just let us know how we can help!