HID­DEN COSTS

Don’t be caught of­f­guard by the hid­den costs of sell­ing

The Day - - HOME SOURCE - By Day Mar­ket­ing

Sell­ing a prop­erty can be a very prof­itable time for a home­owner. By im­prov­ing the home, build­ing up eq­uity through reg­u­lar mort­gage pay­ments, and sell­ing at an op­por­tune time, they can re­ceive an of­fer which is con­sid­er­ably higher than any out­stand­ing bal­ance on the mort­gage.

Home­own­ers may be more likely to con­sider sell­ing now, when the val­ues of many prop­er­ties have sky­rock­eted. Ac­cord­ing to the Na­tional As­so­ci­a­tion of Real­tors, me­dian home prices in the United States have ex­pe­ri­enced an­nual growth each month for more than six years.

How­ever, sell­ing a home isn't as sim­ple as pock­et­ing the pro­ceeds once an of­fer has been fi­nal­ized. Any­one list­ing a home should also be aware of the hid­den costs which can ei­ther rack up some ex­penses prior to a sale or leave you with less of a profit than you might ex­pect.

One of­ten over­looked ex­pense in sell­ing a home is pre­par­ing the prop­erty for sale. This process may in­volve con­sid­er­able work, such as re­plac­ing an ag­ing roof or in­stalling up­dated win­dows to make the home more ap­peal­ing to buy­ers. These im­prove­ments are of­ten ex­pen­sive, and you'll typ­i­cally only re­coup a por­tion of the costs through the added re­sale value. Daniel Bortz, writ­ing for the Real­tor.com, says you'll want to make a list of any ar­eas in your home that need re­pairs. If you don't want to ad­dress the is­sues, you may need to lower your ask­ing price to bet­ter at­tract buy­ers.

Even if your home doesn't need sub­stan­tial struc­tural up­grades or re­pairs, you might still need to in­vest in a num­ber of other ser­vices. Sky­lar Olsen, writ­ing for the real estate site Zil­low, says these could in­clude paint­ing, land­scap­ing, or clean­ing.

If you are sell­ing a va­cant home, or if you're not sat­is­fied with how your fur­ni­ture and be­long­ings are laid out, it can be help­ful to get the res­i­dence staged. Mau­rie Back­man, writ­ing for the fi­nan­cial site The Mot­ley Fool, says show­ing how a new owner could use the rooms might help at­tract buy­ers and shorten a prop­erty's time on the mar­ket. How­ever, a pro­fes­sional stag­ing com­pany can eas­ily cost hun­dreds of dol­lars. Even if you opt to stage a home your­self, you may need to rent fur­ni­ture or other items for this pur­pose.

Pho­to­graphs are of­ten a cru­cial way to get a buyer's at­ten­tion, and they'll be less likely to ask for a show­ing if the im­ages are blurry, dark, or other­wise of poor qual­ity. Bortz says a pro­fes­sional pho­tog­ra­pher will avoid this prob­lem, but can add to the costs of sell­ing the prop­erty. If your real estate agent of­fers to take pho­tos, check out their list­ings to see if you'll be sat­is­fied with their work.

There are a va­ri­ety of clos­ing costs on a sale, and these can deduct thou­sands of dol­lars from the sum you re­ceive for your home. Ex­penses in­clude a num­ber of taxes and fees, such as trans­fer taxes and es­crow fees. Other costs in­clude your re­main­ing share of the prop­erty taxes and a pro­rated share of some util­ity bills.

Even if you've moved out of the home, you'll still want to keep pay­ing for the util­i­ties on the prop­erty listed for sale. Buy­ers are less likely to en­joy the home if it is not ad­e­quately heated or cooled. Dur­ing the win­ter, ne­glect­ing the util­i­ties can lead to burst pipes and prop­erty dam­age.

The buyer is typ­i­cally re­spon­si­ble for some of these clos­ing costs. How­ever, sell­ers may want to of­fer a credit to­ward clos­ing costs or even pick up the tab en­tirely. Amanda Bell, writ­ing for Angie's List, says this of­fer can help close a deal in mar­kets where buy­ers have the greater ad­van­tage.

Real estate agents depend on com­mis­sions for part of their in­come, and some of the pro­ceeds from the sale will go to them. The com­mis­sion, which is usu­ally be­tween 5 and 7 per­cent of the pur­chase price, is di­vided be­tween the buyer's agent and list­ing agent.

Other in­ci­den­tal costs can also add to the ex­penses of the sale. When the pro­ceeds from the sale are used to pay off a mort­gage, you may need to pay a mod­est courier's fee if the pay­ment needs to be per­son­ally de­liv-

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