Selling a house, whether it’s your primary residence or an investment property, can be a complex and financially draining process. It’s crucial to anticipate the costs associated with the sale, especially if you plan to reinvest the proceeds. Unfortunately, many of these expenses are necessary to achieve a fair market value for your home. We’ve outlined these costs below to help you manage your budget, plan ahead, and decide which optional expenses you might want to eliminate.
Breaking Down the Average Costs to Sell a House in Phoenix
You’re likely to spend some money on home improvements before the sale, as these can significantly impact the fair market value. However, some of these preparation costs are optional, and others can take a substantial chunk out of your sales proceeds. Here’s a detailed breakdown of the Average Costs to Sell a House in Phoenix:
1. Pre-Inspection
Pre-inspecting your house isn’t mandatory, but it can cost between $300 to $500. Despite being an additional expense, it’s a worthwhile investment. A home inspector can identify areas that need minor or major repairs, including issues you might have overlooked. A pre-inspection can also give you an accurate estimate of your home’s fair market value.
2. Home Repairs and Improvements
After the pre-inspection, you can start addressing the identified issues. While it’s not strictly necessary, you can sell your home as a fixer-upper for a lower price. On the other hand, home repairs and improvements can significantly boost your home’s value. Kitchen and bathroom updates, in particular, tend to pay for themselves by increasing your home’s worth. The cost depends on the extent of the repairs and improvements.
3. Professional Cleaning
Professional cleaning is another optional step that typically costs between $200 to $400, depending on the size of your home. However, if you have the time and skills, you can handle this yourself. While optional, professional cleaning is highly recommended for busy sellers.
4. Landscaping
Landscaping is essential, but it also includes some optional steps. Basic tasks like mowing the lawn, trimming hedges, and tidying up your yard are necessary and usually cost around $150. However, more extensive landscaping projects can be optional.
5. Marketing Costs
Listing your home on local MLS can cost between $120 to $200, but your realtor usually covers these costs. If you’re selling your home yourself (FSBO), you might want to invest in professional photography. Most buyers consider professional photos crucial when viewing a house. Realtors typically handle marketing costs, including professional photography, so hiring one is often a good idea.
6. Home Staging
Home staging helps buyers fall in love with your home, which can significantly speed up the sale. However, it can cost around $2,000 to rent furniture for staging. If you’re using your own furniture, a stager will declutter and enhance your space for approximately $800.
7. Real Estate Commissions
Hiring a realtor will cost you between 5% to 6% of the sale price, but it’s highly recommended. Most homeowners are not equipped to handle negotiations, home evaluations, and paperwork. Realtors offer several benefits, including:
- The ability to sell your property faster
- Negotiating on your behalf
- Getting a fair price
- Advising on whether your home is market-ready or needs repairs
8. Capital Gains Tax
Capital gains tax is a tax on the profit from the sale of a non-inventory asset, including real estate. Fortunately, in most cases, this tax won’t apply. However, it’s always wise to check. If you’ve lived in your home for a short period, or you’re selling an investment property, vacation home, or any real estate valued over $250,000, you might be liable for capital gains tax.
Additional Considerations
When selling your home, it’s also essential to consider other potential costs, such as:
- Closing Costs: These can include title insurance, escrow fees, and attorney fees, which can add up to 2% to 5% of the sale price.
- Moving Expenses: Depending on the distance and number of belongings, moving costs can range from a few hundred to several thousand dollars.
- Utilities and Maintenance: Keeping the utilities on and maintaining the property until it’s sold can also add to your expenses.
Final Thoughts
Selling a home involves various costs, some of which are optional but can significantly impact the sale price and speed of the transaction. If you’re looking to sell your home hassle-free, as-is, or for cash, consider contacting Oak Street Properties, LLC — a cash home buyer in Arizona that doesn’t require you to spend a penny on home repairs and upgrades. By understanding and planning for these expenses, you can make informed decisions and maximize your profits from the sale of your home.