Selling a house is no trivial pursuit. For many, it could mean moving to a new home or relocating to another country altogether. In either situation, there are significant additional expenses that they may not think of initially.
A simple way of looking at the selling process is to think of how much is still owed on the house versus how much you may get, and consider the difference as the amount to walk away with. It is absolutely not the case. There are many expenses, fees, commissions and unexpected costs that must be paid when one is moving or relocating when selling a house.
To have realistic expectations of the potential costs, keep in mind the following points.
Know the requirements
Most likely, the transaction will involve a real estate agent. Know how much the commission will be as well as other additional costs that are not part of the commission, such as those made on additional marketing costs, staging or open-house hours. In addition, know who will pay the commission for the agent of the buyer. In some countries, including the US, a seller may be required to pay this commission, too.
Once the agent’s costs are figured out, know the specific requirements in your location in terms of taxes, fees, various registration charges, appraisals, etc. An agent should have a list that helps estimate the amount required to pay along the way of listing and selling the house.
Be prepared for improvements and repairs
Anyone who sold a house before knows a bit of investment in the appearance of the house goes a long way not only in helping it sell, but in getting a higher bid. Those investments could be to improve curb appeal — how the house is seen from the street, and fixing cosmetic issues that might turn off house-hunters.
But while a good contractor can give an estimate for how much these quick fixes might cost, be prepared for the unexpected. As with any home-improvement project, an estimate can quickly escalate once the work begins and new issues are discovered. So take the initial quotes and add some margin for potential increases to come up with a realistic view of the cost.
In addition, be prepared for more serious repairs down the road. If an appraisal finds a significant problem, such as with the roof or structural failures, you might be required to make repairs before closing the loan for the buyer.
To avoid such surprises at the end, it might be a good idea to get an inspection done before listing the house to know.
Budget for other expenses
With all the additional work needed to sell, expect an interruption to your daily routine. For example, you might find having to eat out more often while the repairs are done. In case of such a gap between selling the home and getting into a new home, you might have to stay in a hotel or another apartment, which brings a whole list of new expenses.
Be ready to pay for such services ... and all the additional expenses will chip into how much money you will walk away from selling the house, even if they appear to be minimal at the beginning.
Rania Oteify, a former Gulf News Business Features Editor, is a Seattle-based editor.
Selling a house
* Know the required fees, costs and commissions;
* Get realistic estimates for repairs and improvements;
* Add any potential big-costs repairs to the budget; and
* Budget for interruptions that might add to expenses.
