When you sell your home, you can get the highest profit by making the right preparations and using effective selling strategies. However, selling a home also involves a few expenses that can eat into your profit.
Here are the most common home selling expenses that you can expect in the Minnesota real estate market.
- Closing costs After you sign a purchase agreement with a buyer, the process
typically goes to escrow as you and the buyer work toward closing the sale. Closing costs in Minnesota are about 0.91% to 1.21% of the selling price.They include the fees to be paid to various services, such as attorney’s fees, escrow fees, documentation fees, and so on.
In many cases, the buyer pays for the bulk of the closing costs, but it all depends on your agreement. You may agree to split the costs or give the buyer closing cost credits. In addition to the fees, the buyer has to pay for such expenses as home insurance, lender’s fees, and property taxes.
You, as the seller, also has to spend on certain requirements, including:
- Owner’s title insurance policy – This is required by some lenders to protect their interests against unexpected claims to the property
- Deed tax – The tax paid for transferring the title of the house to the buyer
- Outstanding utilities bills for the time you owned the home
- Property taxes for the time you owned the home
- Balance of your loan for the home
You pay your Realtor a commission, which is typically 6% of the sale price – 3% goes to your listing agent and the other 3% goes to the buying agent. The split between the agents, however, may be decided differently by them.
Many homeowners think they can save on costs by selling their homes without an agent. However, a Realtor provides professional services that go beyond listing your home on the MLS. These include creating a marketing plan for the home; preparing listing and marketing materials like professional photos, videos, brochures, and mailers; conducting email blasts; and leveraging their network to find the right buyer. A Realtor will also work hard to represent your interests through all the steps to selling a house.
Without an agent’s skills and know-how, selling a home often takes longer. You could also lose some fantastic opportunities that an experienced agent can readily recognize and take advantage of.
Home staging has become an important part of the selling process. In many cases, it spells the difference between a successful sale and a home lingering on the market for a long time.
Hiring a professional home stager can give you the best results. You can also stage your home on your own with the help of your Realtor, but you must understand the principles that go into a successful staging. You might also need to invest in a few furniture pieces and home décor. You may also need to rent storage space where you can stash away some of your belongings that clutter the house. It would also be wise to hire a professional cleaner to give your home a deep clean and sparkling new look.
If you want to attract the right buyers and get the highest possible price for your home, make sure it is in top condition. Most buyers want a move-in-ready home. Glaring signs of wear and tear, as well as obvious disrepair, can send many buyers scurrying away. Investing in necessary repairs, such as the roof, HVAC, plumbing, flooring, and other major home components, is essential before putting your home on the market.
Home improvements to upgrade or update your home can also add value to it. However, this can get tricky as not all home improvements can yield a good ROI. Some might price your home out of the market, leaving you with no other option but to take a loss.
For example, if the average home value in your area is $200,000, and your home’s present value is $180,000, a home improvement that costs $50,000 will push your home’s value over the average and make it harder to sell.
Simple improvements, such as a minor or midrange kitchen or bathroom renovation, have been found to enhance home value and have good ROI. Work with your Realtor to determine which home improvements will work best for your property and improve its value.
Sell your home with the best possible profit