If you’re hoping to make a fortune on the sale of your home, prepare to lose about $20,000 in last minute expenses. A study from Zillow, a real estate website, showed that the average homeowner spends $18,342 in additional costs associated with selling a home.
Gearing Up For Spring
As sellers gear up for the lurking competition of spring in a particularly fierce 2018, experts across the board are stressing the reality of what the last details of a deal can mean financially. Closing costs can add up quickly, leaving sellers doling out a pretty penny for things like transfer taxes, filing fees, title insurance, and real estate agent commissions, to name some. That’s precisely why Jeremy Wacksman, chief marketing officer at Zillow, suggests, “If you’re planning to sell this year, try to take some time to research what costs you may be responsible for and how they could affect your profit.”
Without doubt, real estate agents add an invaluable resource in terms of providing a solid platform for the complicated business of selling a home, and when the value is on the higher end of the spectrum, sellers can expect an agent’s toll to be substantial. A recent report from CNBC explains, “A typical seller in San Jose, California, will cough up $73,578 in agent commissions, bringing in the total cost of selling a house to $81,507. That’s because the median sales price of a home there is $1.04 million, Zillow found.”
The amount sellers will have to pitch in varies across the nation in multiple ways affecting the total payout for closing a deal differently. For example, CNBC reports that, “Sometimes a fresh coat of paint, carpet cleaning and landscape might be enough to attract the right buyer. In addition to closing costs, sellers seeking professionals to help them prepare the home for sale spend an average of $4,985, Zillow found.” Again, the more house a seller intends to unload, the bigger the budget needed to do so.
Spendy Nature of Selling
Given the spendy nature of selling these days, it’s no wonder that buyers are also often up against a financial mountain rather than a molehill. According to news just out from the Wall Street Journal, “Borrowers who finance the purchase of cars or homes without soliciting quotes from multiple lenders often pay more than their financial peers.”
Often, potential homeowners aren’t aware that rates can vary across lenders to the degree they do, leaving buyers who don’t do their homework in the dark, facing a financial loss that could have been avoided. On this, economist for the Consumer Financial Protection Bureau, Sergei Koulayev, claims, “Most people think prices are roughly the same. The differences are large.”
In fact, Koulayev’s research shows, “The average spread on home mortgages among all borrowers is a half percentage point,” and, more specifically, “Paying 4% interest on a $400,000 mortgage instead of 3.5% amounts to an extra $114 in monthly payments,” as cited by the Wall Street Journal.
Beyond the pinpoint, when looking at the research with a widened scope, the data is even more staggering. According to the Wall Street Journal, “Over the entire market of 45 million mortgages, the estimated cost to consumers who didn’t shop around was a combined $13 billion.” So it seems, the cost of not making the rounds is simply too much to leave on the table.