Selling your home can be a stressful and confusing process, and if you don’t have the right real estate agent guiding you, it can be an excessively expensive process as well.
If you’re doing it right, the average cost to sell a home in Texas is about 16% of the total sales price. For a $350,000 house, that would mean it costs about $60,500, total, in order to sell that home. In order to better understand these costs, we broke them down below.
Preparing to Sell Your Home
Like anything worth doing, selling your home properly takes a lot of research and planning. However, oftentimes there is conflicting and dispersed information on how to sell your home. We strongly believe that planning any project is easier and more structured when you break down each stage of the project individually. In this piece, we’ve done exactly that for selling a $350,000 home.
It’s important to note that each of these categories is best seen as a price range that varies depending on factors such as:
* The age and condition of your home
* Your home’s size and layout
* The level of demand or competition for homes in your neighborhood
* Your yard’s size and layout
* Which repairs/improvements your realtor thinks matter most to local buyers
When navigating how each of the factors will impact the cost of selling your home, it’s always best to turn to an expert real estate agent who knows the local area.
As a rule of thumb, the basic essentials for prepping a home to sell include interior repainting, staging, carpet cleaning/replacement, professional cleaning service, and a handyman to make minor repairs.
Staging and Cleaning
Nationally, professional stagers cost anywhere from $2,300 to $3,200. However, if you would like to save up and plan the staging yourself, it typically costs 0.3% of the sale price for carpet cleaning and professional cleaning service. The average range, according to HomeAdvisor, to clean and stage a home is between $514-$1915).
0.3% of $350,000 = $1,050
Landscaping is important because you’ll want the outside of your home to look just as good as the inside. A professional landscaping job should typically cost around 1% of the sale price however price may vary depending on the size of your front and back yards.
1% of $350,000 = $3,500
Home repairs are essential when selling your home. Fix any holes, leaky pipes, and make sure to put on a fresh coat of paint in order to make your old home look as good as new. This should cost approximately 1-2% of your sales price and include handyman, interior repainting, and material cost.
1.5% of $350,000 = $5,250
Improvements + Upgrades
Sometimes home repairs aren't enough, and major improvements are required in order to boost the value of your home.
This category tends to vary the most because a minor renovation costs about 1% minimum of the sales price ($4,000) and a major renovation can cost upwards of about $50,000. The costs include paying the handyman and for the material costs of the renovation. Age and condition of the home are huge factors when calculating the cost of this category.
We will assume that this house needs a minor remodel which will cost around $4,000.
Realtor Commission Fees
Realtor commission fees are the portion of a sale that goes to the real estate agents on both sides of the sale and the bokerages who helped you list, negotiate, and sell your home. The commission is their compensation for their time, help, tools, marketing, and guidance through the home buying project. Typically in Texas, the commission on a home sale is 6%.
6% of $350,000 = $21,000
Negotiation concessions are typically items or costs that the seller has agreed to cover for the buyer in order to sweeten the deal. Such concessions are acts of good faith in the selling process and they help the buyers close on the deal. This should cost 1.75% (1.5-2% **According to Opendoor as of March 2020) of the sale price.
1.75% of $350,000 = $6,125
Closing costs are the costs that are incurred when completing a sale. In order for a sale to be classified as ‘closed’ in Texas, the agreed upon price must be processed by a title company so that loan rates can be set, outstanding taxes, bills, and fees can be settled, and then money can be transferred between banks. Closing costs typically cost the seller 2.5% (1-3%) of the sale price.
Closing Costs Typically Include:
* Title insurance
* Outstanding bills
* Outstanding taxes
* Outstanding fees
* Transfer taxes *(no transfer taxes in Texas)*
* Recording fee *(no recording free in Texas)*
* Attorney fee
2.5% of $350,000 = $8,750
Purchasing a home warranty up until closing makes your home more attractive to buyers. It builds trust in the sales process and assures buyers that they won’t be buying a home that they immediately need to spend more money on for repairs. Home warranties cover appliances such as electrical, plumbing, heating, and AC. They typically cost <1% of sale price.
<1% of $350,000 = $300-$600 ($450)
In order to finalize the sale of your home, sellers must first fully pay off their mortgage. Once the proceeds from the sale are used to take care of the seller’s original loan, the process can be completed in title. Make sure to pay your loan off on schedule in order to avoid a prepayment fee. Loan payoff typically costs the seller 1-2% depending on the time of year and taxes.
1.5% of $350,000 = $5,250
When it comes to moving and relocation costs, the most important factor in determining cost is whether the sellers are moving within the same city or if they are moving to a new city.
Either way, relocation costs will include a storage unit, a moving truck, boxes, tape, overlap (where sellers are paying costs for their previous home and their new home), and carrying costs (where sellers are still paying off costs from their previous home). Relocation costs typically run the seller 1.5% of the sale price.
1.5% of $350,000 = $5,250
Example Home Sale Cost Breakdown
Here is a breakdown of what the sale of a $350,000 home would approximately cost, assuming that only a minor $4,000 renovation was needed.
After breaking down the numbers, it is clear that the most important and expensive categories when selling your home are the real estate agent commission fees and the closing costs.
While this makes sense because agents, brokerages, and title companies do a majority of the legwork when it comes to listing your home, staging your home, procuring your sign, holding open houses, marketing, negotiating price, structuring your loan, and transferring monies, this should also mean something else to sellers.
In order to extract the most value from these unavoidable costs, sellers must do their research and hire knowledgeable, experienced real estate agents who have the best technology, the best marketing strategies, and can help guide sellers through the entire home sale process. Sellers also need the best title company that can find you the most favorable rate and transfer your money on time.
Contact one of our experienced HomeCity agents for a more accurate true cost-to-sell scenario as well as a current comparative market analysis.