Being a human in the year 2022 is no easy feat. As the world works its way out of the difficulties presented by a two-year coronavirus pandemic, the United States of America finds itself in a polarizing political climate.
All politics aside, the country is also faced with unprecedented inflation and rising prices of food, gas, and housing. The housing market our nation finds itself in is something most never could predict. Home-buyers have an expensive experience in store for them.
Given the current housing market, it might be a good time to consider selling your home.
Selling your house is never an easy undertaking, but it could be worth it. There are, of course, many things to keep in mind when selling your home. Home-sellers need to consider house repair costs, finding a great realtor, the overall local real estate market, closing costs, and much more.
In the current housing market, you can’t help but wonder: what is the true cost of selling your home in 2022?
Typical Costs Associated With House Selling
When realizing the profit that you can make when selling your home, it could be easy to overlook the fact that the seller has plenty of expenses. There are many aspects to consider during the process, and each brings extra costs.
You’re going to want to invest in a great real estate agent. Even with homes in high demand, a great realtor is a difference between the profit you want and the one you don’t.
Choosing an agent belonging to the National Association of Realtors is a great place to start. A great real estate agent comes with a price tag. Be sure to factor realtor fees and real estate agent commission into your overall plan.
If you need to make any home improvements, it’s time to get them done! Home repair costs can be high if there is a lot of necessary work on your home. Proper maintenance over time is always wise, so hopefully, you don’t currently have a mountain of projects to tackle!
You will want to get these repairs done before a home inspection, so there will be fewer surprises.
In addition to home repairs, it might be a good time to make any renovations needed on the house. While these will add to the money you need to spend upfront, they’ll also add to the money you receive when your home sells.
Consider the aesthetics before putting your house on the market. Curb appeal is important!
The first impression the buyer gets could earn or lose a sale. Companies that buy houses in Milwaukee may decide to opt-out if it’s ugly. Landscaping is a big piece of this.
The landscaping of your house will depend on what type of home you own and the location. Spend the money to make the right first impression before potential buyers enter your house. The DIY projects available online might be what you need!
You mustn’t forget to have your home properly staged!
Buyers want to be able to imagine themselves living in your home. Your furniture and decor should be prepared to allow the proper experience for potential buyers. You can choose to stage the house yourself or hire a stager to do it for you. Self-home staging costs you time and maintenance, while hiring will cost you money. You’ll have to decide which one to pick.
The most important fee to consider is the agent commission. More than likely, this will be the largest fee the seller will pay in the entire process. This fee will be split between the buyer’s and the seller’s agent. The commission can depend on a few criteria, such as how long the house is on the market, the cost of the house, and how strong the local housing market is.
Lastly, don’t forget that when you sell your house by yourself, you have to move out! Moving costs can be expensive if proper planning is lacking. Consider all moving costs before creating your budget.
The bottom line is that selling a house is an expensive process that homeowners should not underestimate. Yes, you can make great money from the sale of your home in the current housing market. Despite this, be sure to consider whether you’re ready to take on all the costs associated with this decision.
Have House-Selling Costs Gone Up?
The short answer to this question is yes, house-selling costs have increased.
The COVID-19 pandemic drastically slowed world markets in early 2020. This lull in economic activity continued until mid-2021 when people began to re-emerge and the economy began to recover.
The housing market was not immune to the toll COVID took on how people spent their money. Be sure to study the national average prices and the average prices in your local market.
The cost to sell a house has increased due to the drastic increase in demand for housing. Supply shortages have impacted the price to build or make improvements.
On top of that, one thing that could be impacting the market is the number of houses for sale. Fewer houses on the market mean the value of those homes will naturally increase due to heightened demand.
Selling a house is a different experience from buying one, but it still comes with a price tag. The selling costs have gone up as well. As increased demand for housing goes up, the value of all the services required to sell a house does too.
Property taxes may not have increased by much, but this is only a piece of the puzzle. The many other costs of buying and selling a house can create quite the price tag for those in the process. We are in a seller’s market, but the process isn’t catered to them.
How Much Does it Cost to Sell a House Today?
This answer depends slightly on your geographical location. Selling a house in California will not feature similar total costs as selling a house in Wisconsin.
Leading real estate agents in the current market suggest that sellers prepare themselves to spend up to 10% on sale prices on selling costs. Depending on the value of your home, this could result in a hefty price tag.
We spoke earlier about all the planning and fees of selling a home. Now, let’s consider the average cost of home-selling to paint a more realistic picture. Here are some of the numbers to keep in mind.
The commission fees you pay the real estate agents will be around 6% of the home’s sale price. You can expect to spend up to 5% of the price on staging and general preparations. Fees for the title and settlement of the house (along with general taxes associated) could be up to 3%.
Finally, seller concessions (closing costs) could be as much as 6%.
We didn’t mention planning for inspection and repairs needed. This depends entirely on the general maintenance done on the home throughout your ownership. Those who have taken care of their home have a higher likelihood of fewer surprise costs, but nothing is guaranteed. Inspections can sometimes turn up surprises.
It should go without saying that these aren’t the only things to expect to spend money on. Every sale is different. There could be a few potential extra costs the seller pays associated with closing. The costs the seller pays range from homeowners association (HOA fees), home warranty, buyer’s closing costs, property taxes, and more.
Some sellers may wish to skip the process of enlisting the help of a real estate agent. In this case, known as “for sale by owner,” sellers take control over selling their home. FSBO has many perks but a few drawbacks, such as extra effort on your part.
Remember, the purchase price is not what you earn on the sale, nor is the selling price. While it may be tempting to jump on to your Zillow app or HomeAdvisor and fantasize about how much you could sell your house for, don’t forget it comes with a price for you too!
Will This Housing Bubble Last?
It can be tempting to notice the money some sellers have made on their homes and consider selling your home, too. You know that proper planning is key to ensuring a smooth sale. You should also consider how much time you have. Can we expect this seller’s market to last a while?
Several pieces of evidence suggest that this market will last for a few years. Criteria including the demand for housing versus the supply, heightened energy prices (worsened by the Ukraine/Russian war), and an increased number of younger people seeking a home are keeping the market hot.
While some data points to a potential price decrease, we can expect these prices and home values to be with us for a while. Most experts have expressed that they do not believe we are in a Milwaukee housing market bubble. Instead, we are just seeing the typical reaction to the state of the world we live in today.
Planning is key. Carefully consider every option available to you before making any decisions when it comes to the sale of your home.
The process of home-selling is not an easy one.
There are so many important pieces to the puzzle. Sellers must find the perfect real estate agent, give their home the curb appeal it needs, take care of home improvements, factor in closing costs, etc.
Here in Wisconsin, there are plenty of options to utilize, such as real estate agents seeking your business, investment firms interested in your property, like Cream City Home Buyers, FSBO options, or even those who skip the process altogether and offer cash for your home. With an array of options, it’s easy to get your home sold, despite the process!
Selling a home can be a lot of work. When done correctly, this process can prove to be a fruitful one. It may be the time to take advantage of opportunities and put your home on the market today!