Costs for selling your house can be considerable, depending on the value and condition of your home. Real estate commissions and repair costs can eat into your profit, leaving you with less money than you had anticipated. Developing a solid plan to sell your home and understanding the financial ramifications are important if you want to realise the most profit for your house. There are several things that you should consider before you decide to sell your house.
- Skill level:
Take a look at other homes for sale in your neighbourhood that are similar to yours. Note the conditions of those houses and the sales prices. Determine if you will be able to compete with those houses without doing significant work to your house.
Make a repair budget. You will need to fix items in the house that are damaged or not working. You should repair cracks or holes in the wall and repaint and repair damaged floor tiles. Leaks should be fixed and doors should be checked to ensure that they close properly. Appliances should be in good working order.
Talk to a realtor. Realtors generally receive a 5 or 6 per cent commission, paid by the seller, which is split between the buying and selling agents. The realtor will tell you how much she thinks your house is worth, allowing you get a rough idea of the commission. If you are selling your house for £195,000, a 6 per cent commission would cost you £11,700.
Consider selling your house yourself. You can potentially reduce the costs of selling your house if you take on the responsibility of showing and selling your house without a realtor. There are a number of for sale by owner companies that only charge you for the services you use, giving you the option of saving thousands of dollars in commissions. Companies such as fsbo.com, forsalebyowner.com and helpusell.com provide sellers with contracts, flyers and brochures and place properties on the Multiple Listing Service, which most realtors use to find properties to show buyers.
Ask for recommendations and advice from friends or family members who have recently sold homes. Ask if they used a realtor or sold the house themselves and which options they recommend. Find out if they were able to negotiate a lower commission with a realtor.
Tips and warnings
- Whether you are handling the sale yourself or working with a realtor, consider only accepting offers from pre-qualified buyers. If your buyer is not pre-qualified and can't get a loan, you could waste valuable time and lose offers from other potential buyers.
- Ask if your realtor will consider accepting a lower commission. You will have the best chance of the realtor agreeing to a lower commission if you own an expensive property or if home sales are down in your area.
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