Just because you list your home for $200,000 dollars doesn’t mean you will put $200,000 in your pocket. The fact is that selling your home will cost you a pretty penny. It never ceases to amaze me when I talk to a home seller who believes they will receive the asking price for their home.
Selling your home will cost you dearly. Let’s look at the figures. Let’s assume that you are listing your home for $200,000 dollars with a real estate agent. The first thing most sellers don’t realize is that they will generally sell their home for 95% of the asking price. So now the seller is down to $190,000 dollars. The second thing most sellers don’t understand is that they will be asked to pay a portion of the closing cost. This figure is negotiable but usually ranges between 1 to 3 percent of the selling price. So we will assume 2 percent. So now the seller is down to $186,200 dollars. Sometimes the seller will be asked to provide a home warranty which usually cost around $600 dollars.
In addition to the home warranty the seller will be asked to make repairs on the house. This obviously could vary greatly. Typically the amount will be around $2,000 dollars. So now the seller is down to $183,600 dollars. So what other cost could be included? Well in order to sell your home you will need to fix it up. This means landscaping and paint. These two items could cost $1,000 to $10,000 dollars. So for our example we will estimate $3,000 dollars. So now we are down to $180,000 dollars. Of course if you have already moved out of your house then you are paying two house payments. This could get expensive. For our example we will assume the seller is still in the home. The last big cost to selling your home is the agent’s fee. This is between 5% and 7% of the selling price. So for our example we will use 6%. Therefore the grand total the seller will receive at closing will be $168,600 dollars. That is a big difference!
So why don’t more home sellers consider alternative ways to sell their homes? I don’t know. I always recommend trying to sell your home to a home investor. Investors are in the business of buying homes. An investor typically doesn’t care what the home looks like. They will be able to pay cash and close quickly. Best of all there is no agent involved. Think about it. Before I showed you the cost of selling your home using an agent you would have laughed at an offer of $168,000 dollars. But knowing what you know now, what if an investor offered you $175,000 dollars. Would you consider this offer? Before you sell your home think about the true cost involved and then consider selling to an investor.
By: Max Suther
Posts Tagged ‘Home Sellers’
The Cost of Selling Your House
April 10th, 2010Home Improvements to Increase Home Value – Basic Information to Know
February 7th, 2010Real estate is a fast-paced industry yet the booming market for this sector is definitely a tough and competitive entity to deal with. However for those who are brave enough to venture into real estate, through all the difficulties, the reward is surely promising and inevitably remarkable. One of the very first things that home sellers should attend to would be making sure that their properties have certain edge amidst the myriads of others set in the real estate listings. There are actually several things to do this and the most prominent would be boosting the home value of the house they are selling.
What are the ways to improve home value?
Now more than ever, buyers and potential homeowners are vehemently careful and conscientious in buying or investing their money in real estate. Hard-earned money in times of economic uncertainties is definitely something worth investing in great properties or ventures thus you as a seller must make sure that your property is something that buyers should be putting on top of their list. One very sure step to do this is to make the necessary home improvements in your property that is equivocal to home value. So how are you going to make home improvements that would effectively generate positive results?
What are the different home improvements you should choose?
To make certain upgrades in your home you must basically have a sound discretion and judgment on the kind or particular parts of your house that needs the improvement in order to get the greatest return.
Here is a list of some of the important home improvements you need to consider.
• Kitchen remodeling. This is a very salient area of your house since this is the room where the family spends much of their time interacting with each other. Most of remodeled kitchen has a return-on-investment rate from 80%-93% which is equivalent to an average expense of $15,000 and more. To appraise your kitchen area you may start with the materials, fixtures and appliances in order to have spacious accommodation and thus increase its functionality.
• Bathroom remodeling. Renovating your bathroom could actually give you 85%-90% return of your investment that costs approximately $10,000 and up. Providing two or more bathrooms in the house is a good idea as well as improving some features like tile floors, sinks, bath fixtures and faucets.
• Wall paneling. This is another good renovation idea which you could even conveniently do on your own. This is great in improving your home value because the exterior quality and appearance of your home is a great way to attract and make buyers consider your property. There could even be multitudes of designs you can choose from which you could customize for your prospective buyer’s preference.
Home improvement definitely enhances your home value and that is quite proven in the real estate trend. To be effective and see greater results for this kind of endeavor, it is important that you make proper calculations so that the cost perfectly matches the return-on-investment you would benefit from.
Easiest Ways to Finance Home Improvement Projects
August 23rd, 2009Many people are trying to sell their house right now and they’re finding that the market still favors home buyers over home sellers. In order to make your home more attractive to a potential buyer you may need to consider some small upgrades or home improvements to set it apart from the competition. Home improvements can not only help you sell your home but depending upon the upgrades you choose to perform they may actually help you get a higher selling price for your home.
In order to improve your home the way you should you’re going to need to set some money aside to really get the job done the right way. You could save some money on your home improvement projects by perfoming them yourself, but if you’re in a hurry to sell your home then you may want to consider hiring a professional.
There are several ways you can borrow the money needed for quick home improvements, but some methods of financing a big home improvement project are much easier than others. Here are some of the more common ways of paying for large home upgrades in order from easiest to most difficult to attain.
The easiest way to actually pay for a large home improvement project is to have the money on hand already. Not a lot of people have thousands of dollars hanging around but many people do have items they can sell to raise some money. You could sell old tools, a boat, a car or simply go through your basement and sell items online all to raise the money you need to pay for a home improvement project. Depending upon what you have to sell this could either be the easiest or most difficult way to finance a home improvement project.
Home improvement store credit cards are another way to pay for smaller home improvement projects, usually totally ten thousand dollars or less. Getting a credit card from a hardware store is usually not very difficult even if you have questionable credit. The problem with cards like this is that they can sometimes have high interest rates and high fees if you aren’t careful. To get a home improvement store credit card you usually just have to fill out a single form from the store.
You can also use the equity in your home to get a home improvement loan. You could take out a home equity line of credit, a home equity loan or even a second mortgage based on your needs. These types of financing are more difficult than a credit card to obtain and they’re dependent upon you having enough equity in your home to qualify for them. Most of these types of loans carry an initial fee of a couple hundred to several thousand dollars and there are usually closing costs and inspections to go through as well.
The most difficult type of loan to get for a home improvement project is probably a loan directly from a bank without putting anything up for collateral. To get a loan like this you’ll probably want to present the bank with detailed improvement plans, quotes from one or several contractors and proof of steady income. Different banks offer different types of home improvement loans and some may be more willing to work with you than others.
Generally, it is easier to pay for home improvement projects by selling things or having the cash on hand than it is to apply for any sort of home improvement loan. Home improvement credit cards are easy to obtain and good for small projects, home equity loans are good for larger projects if you have the equity in your home and straight bank loans are usually the most difficult loans to obtain for home improvement purposes.
By: JT Miller
