How Much Profit Will You Make Selling Your Home?

A home purchase is the biggest purchase most of us will ever make. Some of us do not start with our "forever" homes and end up buying and selling several times before we settle. If you have never sold a home before, and you are trying to figure out what costs to look out for and what you will make from your home, you have come to the right place!

COSTS ASSOCIATED WITH SELLING:

1. Prep Costs - Fresh coat of paint, fixing nicks in the walls, landscaping, any and everything you can do to make your house have, not only that curb appeal, but that interior appeal as well. Depending on the condition of your house, you will have to figure out how much you want to spend here. Include staging the house, needed repairs, etc. Keep in mind, some repairs you can be negotiable come contract time! Average, according to Thumbtack, is around $5-8k.

2. Moving/In Between Costs - If where you are going is not going to be ready by the time you are ready to go, you must factor in move out costs, storage costs, move in costs, etc. Everything from movers, boxes, possible leaseback options, etc. you must factor in to your selling costs!

3. Payoff Amounts - How much do you still owe on your mortgage? Do you have an equity loans or liens? With the proceeds of the sale, you must look to pay these first.

4. Closing Costs - These are the real "bugaboos". Sellers have gotten used to paying between 8-10% of the home's sale price in closing costs. The majority of the closing costs are commissions to agents. Make sure you speak to professional about your options here. You have more than you think! Other types of closing costs, that are negotiable, but could be paid by the seller are title, HOA fees, attorney fees, escrow, transfers, and taxes, just to name a few!!!

HOW MUCH WILL I WALK AWAY WITH?

1. Get the Value and the Potential Sales Price - Once again, reach out to a professional to run a market analysis and pull comps.

2. Payoffs - As mentioned above, get a payoff quote from your lender. Make sure and ask about prepayment penalties. Subtract this from your intended sales price.

3. Prep Costs - Subtract the estimated prep costs from the intended sales price. Also be prepared for concessions. Often time, sellers end up paying about 1% of the sales price in concessions to the buyer.

4. Agent Fees - Do not forget agent commissions. Depending on a number of variables, and even more so as of recent, the percentage here varies. Speak with a professional and go over this in depth because this is generally a HUGE chunk of change.

5. Remember Transaction Fees - All sellers end up paying some type of transaction fees. These "closing costs" can be anything from title, HOA, taxes, etc. These can be negotiated of course in writing the contract but expect to pay.

EXAMPLE:

House's Intended Sales Price $400,000.
Payoff Quote(No Prepayment Penalty) $270,000.
Prep ( Prep, Staging, Repairs, Etc.) $8,000.
Commissions ( Assuming 6%) $24,000.
Transaction Fees(Assuming 3%) $12,000
Moving(Movers, boxes, New home is ready) $6,000

Profit from Scenario : $80,000

In Conclusion...

Hopefully this has helped you understand some of what goes into selling your home. A professional will be able to help you balance theses costs, negotiate, and everything before, after and in between. Happy Selling!!