When you’re selling your home your focus is often going to be on the bottom line, and how to maximize it. This generally leads you to focus on list price and potential inspection items you need to fix, but have you factored in the other costs of selling your home? It’s more than just Realtor commission, and while you will generally come out on top if the market is right (like it is in the Broomfield area right now) you need to keep these costs in mind.
Here are some sneaky things you need to budget for when selling your home:
When you set off to list your home one thing you’ll likely be told is to finish off some small projects in your home. Depending on the state of your home this could range from painting to landscaping. The general goal is to neutralize your home to make it easier for homebuyers to imagine themselves living there. So removing bright colors from your walls is key. Talk to a Realtor about what projects they recommend for your home to get an idea of how much you will need to spend.
When you sell your home, the proceeds of the sale go to payoff the remaining balance on your mortgage. What many home sellers aren’t aware of is a potential early payoff fee and prorated interest payments. These take away from your bottom line and can sneak up on you. The good news is these fees are covered by the gains from your home sale and don’t come out of your pocket.
Capital Gains Tax
Selling your home gives you income and in rare cases, you can be taxed on this. For most homeowners, they will be exempt from claiming this income, but it’s best to do your research so you can be prepared. Your Realtor will be able to give you guidance regarding your taxes. Single homeowners can exclude up to $250,000 and married couples can exclude up to $500,000 if:
- You have occupied the residence for two of the last five years AND
- You haven’t used the exemption for another home sale in the past two years
Moving costs aren’t going to be a high expense for most homeowners, but moving isn’t cheap and the costs can sneak up on you. Make a plan for moving so you can best assess how much it will cost you. Factor in the cost of trucks, professional help, boxes and even meals for friends and family who are helping you out. If you are hiring a professional ask your Realtor for a recommendation.
This cost is optional, but if you are in a higher price range staging can help you sell your home faster and for a higher price. Talk to your Realtor about the value of staging and they should be able to offer you a referral. Staging can be done with the furniture you own or could require you to rent some key pieces which can increase the cost. Do your research before listing so you can be prepared.
In the current market of the Denver metro area sellers are likely to see a nice profit making these costs feel minimal. If you are ready to sell your home contact us today to get started.