You found the home of your dreams and you can’t wait to move, but there’s still a major obstacle to overcome before you can start packing your boxes: selling your current property.
From first listing your house to signing the dotted line on the final closing agreements, there are several considerations to juggle before you can move on to your next home. Does your current house need some upgrades before it’s ready to sell? What should the sales price be? Will you need to work with a realtor?
If you don’t have the answer to these questions just yet, don’t worry. By understanding what you can do to minimize expenses and maximize your returns, you can get the most out of your property investment.
Preparing your home for sale
Let’s start off with the question everybody’s thinking: How much does it really cost to sell a home?
First, the short answer: Experts say homeowners should expect to pay approximately 8-10% of the selling price. While this estimate covers some common expenses, including small repairs and potential agent commissions, it overlooks some of the hidden fees you may incur before you close the deal.
Now, let’s get into the longer answer and how you can maximize the returns on your property.
Home renovations and home repairs
One common misconception is that your home will need to undergo a major renovation to sell. Here’s the good news: You can stop adding to your DIY Pinterest board filled with shiplap and modern farmhouse-inspired spaces.
While kitchen and bathroom upgrades can increase the value of your home, you likely won’t see a full return on how much you’ve put into the project. Instead, take the time to check out comparable listings near your neighborhood and see what you may need to do to compete in the market.
As U.S. News & World Report explained, homebuyers today expect move-in ready conditions and want to see a blank slate that helps them imagine themselves living in your home. Rather than pouring your resources into a major renovation, you might just need to update some appliances, paint walls with more neutral shades and replace the old carpeting.
Replacing your appliances can cost anywhere from $250 to over $3,000 for each — depending on the model you go for — so it’s important to prioritize older spaces or major focal points in your home, such as the kitchen. However, with some DIY handy work, you can cut costs on projects like repainting.
Before you sell your home, you’ll also need to tackle any major repairs, such as cracks in your foundation or an aging roof. Although these won’t be the most budget-friendly fixes, it will pay off to handle them now rather than waiting to fail your home inspection.
If you’re more than happy leaving DIY projects up to the designers on HGTV, you may want to consider selling with Bungalo. This allows you to skip the costly repairs and move on to your next home or property investment — no sweat equity required.
Landscaping dos and don’ts
Curb appeal is an important consideration, but you won’t need to go crazy with brand new greenery.
Similar to major indoor renovations, any big projects you do in your yard right before selling won’t help you to recoup the costs of closing. Instead, take a look around your yard and focus on fixing up what’s already there. That may include raking up stray leaves, cleaning your garden beds, trimming back unwieldy bushes, or adding some new mulch.
Just a day’s worth of hard work can pay off immensely, and depending on what your yard needs, it could be entirely free.
Staging your home
The national average for staging a home comes in at just over $3,500. While this includes furniture and decoration rental, full furniture rentals can cost significantly more for extended periods.
Professional stagers will arrange decor to highlight your home’s strengths and downplay its weaknesses. This may include using lighting and mirrors to create the illusion of more space or building the walkthrough around the most impressive room in your home. However, you don’t always need to work with a professional to make a great first impression.
Some helpful tips for creating a space that any potential buyer would love to live in include:
- Keep it clean: Cutting back on clutter and giving your home a thorough cleaning can make all the difference. If you have spare paint collecting dust in the basement, now’s the time to use it to refresh your cabinets or give your walls a new look.
- Play up your strengths: Thegoal is to highlight the best features your home has to offer. For example, if you have a pantry or closets with a ton of space, remove any large items to help buyers better see the value.
- Add a little personality: While it’s certainly true that potential buyers are interested in seeing a neutral space, that doesn’t mean you have to stick with an all-beige or equally neutral color palette. Play around with the decor you already own to create an eye-catching and on-trend space.
And, when in doubt, a fresh batch of cookies and a few candles can always help.
Negotiations and real estate agents
Real estate commissions — what you pay an agent to sell your home — are one of the largest expenses in the home-selling process.
When you’re working with real estate agents, typically the seller’s agent and the buyer’s agent will split a commission fee of about 5-6% of the purchase price of the home at the close of escrow, according to Forbes.
Remember these rates are often set on a case-by-case basis. When you first list your home with an agent, they’ll work with you to negotiate their commission fee. Keep in mind that while this fee eventually goes toward both agents’ paychecks, part of that percentage will also cover supplemental fees such as marketing and paperwork costs.
If you’re more comfortable working with a listing agent, interview several in the area to find the one that best fits your needs and budget. It’s important to remember that going with the one with the lowest commission rate won’t always be the best option. Instead, look for agents who are experienced in your local market and have a clear understanding of your goals.
One way many homeowners try to avoid realtor fees is by listing their home as for-sale-by-owner (FSBO). If you venture down this path, remember that you’ll need to serve as both the homeowner and the real estate agent, showing your home to prospective buyers, working through negotiations, and managing the legal process, including the transfer of title and final contract.
If you’re looking to skip agent fees as well as the time and effort that selling on your own requires, you can also sell directly to Bungalo. With a cash offer based on your home, its condition, and local market data, there’s no uncertainty surrounding whether you’re getting a great deal — just money in your pocket.
Closing the deal
Congratulations! You’ve sold your home and it’s time to pack up for your next adventure.
Well, it’s almost time. There are still a few important considerations before you truly seal the deal. First and foremost, the mortgage on your current home.
Most loan terms can last for 30 years, and few homeowners stay in their houses for that long. While you can move before completely paying off your debt, there are some steps you’ll need to take in advance.
Once you decide to sell your home, check in with your lender and confirm your outstanding balance. By knowing that amount, you can ensure that the final sale price will help you pay off your loan. Go over your mortgage paperwork as well, since you’ll need to keep an eye out for due-on-sale clauses that require you to pay your loan in full after selling your home or transferring the deed.
In addition to your mortgage payment and your agent’s commission fees, there are several other expenses associated with a seller’s closing costs. As you create your budget and set your listing price, be sure to consider factors such as:
- Hiring professionals: Will you be working with professional movers? Hiring movers costs about $1,500 on average, including a rate of $25 to $50 per hour for each professional, as reported by HomeAdvisor.
- Relocation costs: The other side of moving is determining what your expenses will look like in your new home. This can include any additional furniture you need, property taxes and monthly utility costs.
- Moving materials: If you decide to manage the moving process on your own or with the help of family and friends, there are still some additional fees. These costs may include boxes and packing materials, renting a moving van and any temporary storage unit fees.
With all of this in mind, a home seller should expect to pay a total closing cost of about 6-10% of the sale price according to Nerdwallet.
Why sell directly to Bungalo?
If all of this has turned you away from selling your home, we get it. The traditional sales process is confusing. Sellers end up having to pick up several additional expenses, juggling endless challenges before they can finally move on to their next home.
That’s why we created Bungalo to help you sell your house and move into your next home as quickly as possible.
We’re here to make every step of your experience as smooth and straightforward as it should be, providing an easy, technology-enabled platform to guide you through the sales process. As you close on your current property, you can also browse our certified homes and tour any that you like. And, with the option to finance with the lender of your choice, you can move forward with confidence that your next home will be your dream home.
With Bungalo, there’s no cleaning, staging, or open houses for you to manage. Our easy and mostly remote process means that you can focus on your next home or property investment — minus the DIY projects or costly repairs.
Keep more of what’s yours and avoid unnecessary expenses by selling your home to Bungalo.
This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Bungalo always encourages you to reach out to an advisor regarding your own situation.
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