$$$What's the total? How much will I make? Will I lose money? $$$
These are all some of the first questions when you decided to sell your home.
We all move, or sell real estate, for different reasons. To upgrade, to downsize, for personal reasons, or even as an investment. We all have different reasons for selling property but we all have one common goal. To make money!
Most people just look at the simple math when deciding to sell their home. They look at only:
Sale Price - Mortgage Payoff= Money in My Pocket
However, there are many other factors to take into account when determining your final "profit". Keep in mind that all of these items are conditional and will only apply to your individual case.
Some other expenses that may be included when selling your home could be:
Credits to Seller
This is a cost that is not fixed or guaranteed on every real estate transaction. Any credits to the seller could include seller paid closing costs or even credits toward repairs. This is a total that would be paid from the seller's net profit.
This cost total is typically the largest chunk of where the proceeds go toward. The first value you want to look at when deciding to sell your home is what you will profit to ensure that the most important debt is paid off. Obviously, you would not want to sell your home for less than you owe on it.
Realtor commission percentages differ from state to state and even from agent to agent. This is the cost set by your real estate agent when you enter into a listing contract with them. The cost is to cover the resources provided by the real estate agent such as their administrative team, marketing, and events to promote the sale of your home. The commission paid also go toward the agent that brings the buyer for your home.
Real Estate Taxes
Taxes paid differ from state to state according to your local laws. The taxes owed may have already been paid for the year or they will be required to be paid at closing.
Closing, Title, & Admin Fees
There can be several small fees charged to you, the seller, at closing that are widespread and miscellaneous. For instance, there can be charges for pulling your mortgage payoff, running title work, title administration fees and standard administrative fees.
Repairs Requested by Buyer
During the negotiating process, your potential buyer will most likely have the home inspected. This is to ensure that the property they are investing in has no significant damages. Any significant damages can be requested of you the seller to repair or replace at your expense.
Some other expenses could also include second mortgages, if applicable, or a home warranty requested by the buyer.
Prior to closing, you should receive a document, frequently referred to as a closing disclosure, from your real estate agent or the title company. This will outline all of the "math". It will detail all costs associated with the sale and highlight your final "net profit".
Ensuring that you have chosen the best real estate agent for you will help you fine tune the best price to sell your home for in the current market to make sure that your profit is at its full potential.
If you are selling, or thinking about selling your home, here are some other blog topics you may be interested in.
Is it time for you to get Pre-approved for a mortgage?
If you are considering purchasing a home in the near future and are ready to start preparing for the pre-approval process fill out a pre-approval request form here.
When you are looking to purchase a home it is important to know the steps involved in the buying transaction. Take a look at this article on the 10 Important Steps to Buying A Home