That sweet, sweet amount of cash when you sell a house might be the only thing on your mind, particularly during the process of planning for a sale. It is easy to focus on it to the exclusion of everything else. However, it is, in fact, extremely prudent to keep in mind the hidden costs that come when selling a home if you do not want to be caught off-guard and end up with less profit than you had initially anticipated.
Many buyers will demand a house inspection before they are willing to commit themselves to a purchase. Such an inspection serves to reveal the hidden flaws of a home. Leaks in the roof, bad wiring, and similar are all issues that can crop up. A lot of the buyers will also demand that the seller cover the cost of the inspection. Even if that does not happen, it is still beneficial for you to request an inspection yourself before you get into the process of trying to secure a sale. This will help you know what you need to improve in your house. And avoid the awkward situation of failing to sell due to the revelation of problems with your home.
Required renovation and remodeling
You want to be particularly careful with these two unless you want to end up needing creative ways to get out of debt. Namely, it is very easy to overspend and waste the entirety of the money you would have gotten for a house sale in advance. Now, of course, you need to perform the necessary renovations to make your house viable on the market. No one is going to buy a home with ruined gutters and a sagging roof, for example. But if you want to enhance the price of your property and go too far, you would just be losing money.
The cost of storage
You will likely need storage for things from your old home. Because it is advisable to leave only the bare minimum of furnishing behind, if even that, you will need to find a place to put away a house worth of stuff. And, as experts from professionalmover.ca warn, that is not cheap since the bigger storage you need, the more the costs tend to rise. It would be silly not to account for this when planning a sale since it can significantly cut into your profit margins. If at all possible, you want to try and get as many of your belongings to your new house well ahead of time.
Many people tend to forget about the extent of their real estate agent fees until the very end of the process. It is also very much recommended to look at the fine print of your contract since it is very likely that your realtor will include a certain percentage of the sale price as part of their payment. Now, this is actually a reasonable request. You’d be relying on the realtor’s expertise and connections to sell your home. The advantage of this is that the price will likely be significantly higher than what you could have secured on your own. Not to mention all the legal help that your realtor can provide when it comes to navigating the sale. Interestingly, this is also a hidden cost of buying a house, though in that case, you are facing a flat fee instead of the sale percentage.
Moving to a new home
Do not forget that you still need to move to a new place once your old house is sold! And, if you are not careful, this can cost a lot, particularly considering the fact that you would be moving all of your earthly possessions. What you want to avoid during your move and so you can make it affordable is making multiple trips back and forth. Plan how much space you will need and ask for enough moving trucks to get your belongings to the destination in one go. This is because the alternative takes a lot more time and accrues much higher moving fees.
Preparing for house tours can cost a lot of money. The very first expense is hiring a good staging company. They will make sure that your house looks as appealing to potential buyers as possible, of course. But you might consider skipping that step since you can do most of the work yourself. What is much harder to avoid, and in fact, practically impossible in the current housing market are online tours. The cost of organizing one can be downright startling. And the only real alternative you have is trying to give one yourself with only your phone. Since a lot of people nowadays prefer house hunting from the safety of their couch, this is something you have to invest in.
Now, this might be the largest of the hidden costs that come when selling a home. The reason for this is simple. When first getting a mortgage, you sign up for a certain number of years you would be paying it. Selling the house would constitute breaking the contract and require fees to be paid for doing so. Frankly, if you have not done it already, you should look into ways to pay off a mortgage early since the alternative is losing a good chunk of your profits. Alternatively, you could delay the sale until you have fully paid off your mortgage.
There is admittedly a surprising number of hidden costs that come when selling a home. There are enough of them to make you feel discouraged. However, if you tackle them slowly and one at a time, you should be able to reduce them to a minimum, especially if you take full advantage of the knowledge afforded to you by our guide.