Spring time is here and with that typically comes an increase in homeowners ready to put their houses on the market.
If you have been thinking about selling, here are some typical costs that are involved and some useful tips to help you get started:
Before listing your home: These are typically a matter of choice but they could be great investments to help make sure you get top dollar for your home
- Exterior Painting/Power Washing: You would be amazed at how a fresh coat of paint or a quick power wash could spruce up the look of your home. Depending on the size, these are the most cost effective.
- Landscape: Next to the color/condition of the exterior, the landscape is the first thing a buyer notices. If you’re an avid gardener then you probably just need some finishing touches but if you don’t have grass or any curb appeal then you will definitely need to either make a trip (or two) to Lowe’s or hire a professional.
- Fix ups: There are some that should be done prior to listing (i.e. a cracked window or a stain on the carpet) and there are some that could be the buyer’s responsibility (this is where the home inspection and/or pre-inspection report plays a role).
- Pre-Inspection Reports: These are not required and a buyer expects to pay for a home inspection but it is not a bad idea to have a professional come in and check for structural or termite damage. Depending on what is found, it would be beneficial to have those things fixed before the home is listed in order to have the selling process remain as smooth as possible. If there is some major work that needs to be done, it can be disclosed when the home is listed and the buyer already knows what’s in store.
- Staging: There is nothing wrong for a house to look lived in, however, if your home could give “Hoarders” a run for their money, then it’s probably best to invest your time into reorganizing and staging. The cost can vary depending on the size of your home and how much assistance you may need but it’s a great investment. Even if you stage it just for pictures to be taken, its worth it. Why? Because first impressions matter! Would you go on a first date wearing clothes that look dirty and slept in or would you dress to impress and maybe splurge on a new outfit? The latter because a great first impression goes a long way!
- Lights and Heat/AC: If you are moving before the sale of your home or are selling an investment property that sits empty, it is best to leave the utilities on. High humidity can cause mold and other moisture damage which can be avoided by leaving the AC turned on. Not to mention this makes the house more comfortable for showings (especially in the Charleston heat).
- Homeowners Insurance: People are often surprised to hear this but, if your home sits vacant for a certain amount of time and you do not notify your insurance company, you could be dropped from your homeowners insurance policy. Vacant homes can present numerous liability issues so it is best to advise your insurance company if your home is sitting vacant. Depending on your insurance company, you can ask for a rider to cover any period of vacancy or a separate policy.
After the sale: Congratulations! Your home has sold and now it’s time to finalize everything at the closing table.
- Agent Commissions: Typically, these are paid by the seller and may be split if there is a separate buyer’s agent.
- Closing costs: Attorney’s fees, deed stamps, and unpaid property taxes are the three main costs for sellers (after commissions). South Carolina charges a deed recordation tax on real estate of $2.60 per thousand for the State Deed Stamps plus $1.10 per thousand for the County Deed Stamps, for a total of $3.70 per thousand of the sales price. Property taxes would be prorated from January 1st.
- Credits to the buyer: These are a case by case basis but the ones most often seen are payments for contractors and repairs. In some cases, no credits are given to the buyer.
- Capital Gains Tax: If you are selling a second home or investment property , and you earn less than $250,000 on the sale (or less than $500,000 if you’re married and file jointly) then this does not apply. (This also does not apply for primary residencies.) If you earn more than that, then you’ll need to do some research. My advice would be to consult a tax attorney who could give you advice on how to defer capital gains tax (ex. 1031 exchange).
- Moving costs: This could range from paying for pizza and beer for a few of your buddies to load some boxes or paying for the professionals to come in and do everything.
Note: This is a generalized list and does not always reflect every transaction.
If you think you are ready to put your home on the market, I would love to help. Feel free to email me at email@example.com.
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