Understanding the Costs of Selling a Home in Southern California
Are you familiar with the cost of selling a house in the Southern California area? Learn what to expect before your rush to put your home on Multiple Listing Service (MLS), selling on your own, or partnering with a home buying company. You might be shocked at how the costs of selling your property can eat away at your profits!
Selling your home can be expensive when you consider the direct and indirect costs involved. Worse still, there are several things to pay for before and after the sale.
In this post, we will explore the costs of selling your Southern California home using the three most common methods: Compare these options cautiously and see which one offers you value for your money.
Costs of listing (using MLS)
Agent costs (commission)
This will vary depending on the real estate agent you choose to work with. In most parts of the U.S, Southern California included, you will pay agent fees of around 6% of the final sale price of the house. For example, if you sell your home for $300,000, you could end paying 18,000 in agent fees.
At times, you may be lucky to negotiate a lower commission. But this only happens when the house in question is expected to sell quickly, the home price is relatively high, or the local market is strong.
Marketing costs
Regardless of whether your agent slips in marketing fees in their rate, there are a handful of marketing expenses you should consider adding for your house to sell fast.
For instance, many sellers will enlist the help of a professional photographer to take photos of their homes. Others will utilize drone service companies and videographers to get quality aerial shots of their home. You may also wish to upgrade your listings to “premium” so that they appear at the top when potential home buyers are searching for property in your area.
Pre-sale home inspection
A pre-home inspection cost about $400 or more to conduct. It is an optional practice for many. However, some sellers opt for a pre-sale home inspection because they want to identify any mechanical or structural problems with their property before a buyer comes in with their own inspector.
Repair costs
If a home inspector identifies any problem, you might have to do some repairs before listing your home. You might need to spruce up the exterior and interior of your house, repair a leaky faucet, apply a fresh coat of paint, repair the staircase, revamp the damaged roof, etc.
Such repairs will set you back financially; thus, be prepared to incur them if you decide to go the MLS way.
Cleaning and staging costs
Potential buyers like to visualize how a house would look after moving in; therefore, being the seller, you may be required to do some staging. For instance, you may need to rearrange the furniture and depersonalize the home.
Some sellers will opt to involve a professional stager, which, though, does not come cheap. The cost of a stager depends on various factors, such as the extent of the work involved, the size of the home, and the period the house has been on the market. Approximately, expect to pay several hundred dollars, at minimum.
Closing costs and additional fees
In most real estate transactions, homebuyers usually pay a closing cost of 2-5% of the final sale price. However, are you aware that the seller is also required to foot the closing costs in some instances?
Don’t be shocked if you are asked to pay for some of the buyer’s costs, particularly if you are selling your house in a buyer’s market.
Some of the sellers closing costs may include property taxes, title insurance, homeowner’s association fees, transfer fees, and attorney fees. You also may be asked to foot the brokerage fee, courier fee, and escrow fee.
Note: All these fees are negotiable, and chances are you will only pay for a few of them. But still, it helps to be prepared.
Continued ownership costs
Listing your Southern California house with a real estate agent can take some time. Let’s say, months. During this time, the seller will still be responsible for the utility bills, landscaping, maintenance, homeowners insurance, and probably mortgage. When you add up all these expenses, it can total to thousands of dollars!
Cost of FSBO (For Sale by Owner)
While selling your Southern California home on your own will help you avoid agents’ costs and commissions, there are other expenses to consider. Here are some additional expenses to expect when selling your home by yourself (FSOB).
House preparation costs
Getting a home ready for a sale entails a lot of work. Just like the MLS option, there are several things you need to factor in before a property is advertised for sale.
For example, you will need to clean your house spotlessly. Moreover, you will have to do some repairs after the pre-sale inspection is done. Some sellers will also incur storage costs for their unnecessary belongings, as well as the fees for a professional stager. And again, as we mentioned, this can be very costly.
Heightened marketing costs
When listing a home via MLS, any extra advertising efforts and costs are incurred at your discretion. But when you are selling a house on your own, 100% of the advertising and marketing expenses are up to you.
You will have to pay for the signage, open house costs, printed materials, and online listings. You will probably want a professional photographer or videographer to come in to assist you, present the home in the best light. Also, you may opt to do some virtual tours of your property, which will cost you money.
Time-related costs
When you opt to sell the house on your own through an FSBO listing, you will undoubtedly spend too much time dealing with the sale.
For instance, you will need time to create listings and marketing materials, process paperwork, be available for showings, handle negotiations, respond to questions, and more.
Costs of selling directly to a home buying company
None
When you choose to sell your Southern California home to a home buying company like Blue Hearth, you will avoid all the selling costs highlighted above. There are no agent fees, closing costs, or even repair costs. Blue Hearth buy directly, as-is, saving you tens of thousands of dollars along the way.
Do you want to avoid the costs of selling a house the traditional way? We are ready to help. Give us a call to learn more!