Know the Hidden Costs of Selling Your Home
If you're planning to make a move, you know you'll have to plan a budget. There are some obvious costs ahead of you including movers, the real estate agent's fee, the loan (of course!), possible repairs, and house cleaners. Maybe you need some new furniture or want to refinish the floors and paint the new house. That's about it, right?
Before you start planning a trip to Italy with your house sale profits, be prepared to fork over some "hidden" fees. While some are small, they add up.
After I list a home for sale, I'll provide the seller with a Seller Net Sheet that shows where all the extra money goes. You might be thinking of listing your home for, say, $500,000. Sounds like a nice profit over the $410,000 you paid three years ago. In reality, you might barely break even.
Preparing Your Home for Sale
Staging your home can be as simple as moving furniture around and packing away display items. Or it could be stripping wallpaper, repainting, pulling up stained rugs, repairing or replacing broken items, and working with a professional stager to get it all done.
In my opinion, home staging is not an option and your competition in Winnetka, Wilmette, or Kenilworth will be doing it.
Staging costs vary but can be minimal to many thousands of dollars. Remember the adage, "the cost of home staging will be much less than your first price reduction."
Most home inspections uncover a myriad of issues - most inconsequential, but some are serious and might need to be addressed. Major problems generally deal with the roof, plumbing, HVAC, mold, asbestos, and water issues.
Every real estate deal is unique and what the buyer asks for is dependent on their level of comfort with the home, how much they paid, and the value they see in their purchase price.
Sellers are under no obligation to pay for repairs and they can elect to not negotiate repairs all the way to paying substantial monies for previously unknown defects.
There is no rule that you need to hire an attorney - but it is common practice on the North Shore and the other party to the contract will probably have one. Real Estate attorneys charge anywhere from $300 to several thousand.
If you're lucky, you will move out on the same day as you move in. But if you move before you sell, you will need to keep your insurance in effect and it might cost more for an unoccupied residence.
Again, if you move out before you sell, it's prudent to keep utilities on for showings. Not a huge expense but something to consider.
These are taxes levied by the state, county, and town when title transfers. Wilmette, IL has a buyer fee which is not included here.
- Illinois levies a seller transfer tax of $1.00 per $1000 of sales price.
- Cook County levies a seller tax of $.50 per $500 of sales price
- Evanston levies a seller tax of $5.00 per $1000 of sales price
- Highland Park levies a seller tax of $5.00 per $1000 of sales price
Cook County taxes are paid in arrears - this year's bill is for last year (in two installments.) At closing, you will pay upfront for this year since you won't be in the house when the bill is due. Your real estate attorney will help you with this number, but it's substantial so be prepared.
This is a seller fee for title insurance protection that guarantees that a buyer has clear title to purchase the property. (Charges, based on an $800,000 Winnetka home, vary from $2500-$4000.)
At the closing, you will owe the bank interest on your outstanding loan balance from the time your last payment was made.
As the seller, you will need to provide an updated survey at closing - must have been done within 6 months of closing. ($600- $800)
Many of the closing costs have already been discussed above, however, there will still be small fees for wire transfers, delivery service fees, processing fees, recording fees, etc.
Knowing upfront what all your seller-related fees will be will make your closing go more smoothly and keep your stress levels in check!
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Jeff Dowler - I don't want sellers (or buyers) to be surprised at closing - and I agree that a net seller sheet is imperative.