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5 Hidden Home Buying Expenses
by Marie Baginski | 21 August, 2023
For many people, when they think about selling their houses, the first thing they will do is look around for a local agent. Agents can be a wonderful asset when selling your house, however, it is not the only strategy you should consider. By doing a little homework, you can successfully sell your house on your own, saving you time and money overall. On this blog post, we will discuss some of the most common costs of a traditional listing, so you can determine if hiring an agent is the best choice for you!
The Pre-Listing Costs
Before you consider putting your home on the market, take a look at other homes on the MLS. Check out what people are asking for comparable properties and more importantly, look at what comparable properties are actually selling for. How does your house stack up? Will people opt for your house over the one next door? You will need to look at it from a buyers point of view. They will want to get the most for their money. This means you will likely have to make some repairs, touch-ups and even upgrades to the home in order to be competitive. Houses that sit on the market lose interest among buyers over time. If the property doesn’t sell, people will likely believe there is something wrong with it. You need to come out of the gate with a house that wows potential buyers and proves to be an excellent value for the money.
Agent Costs
Agents don’t work for free. Many agents work incredibly hard and deserve every penny you pay them. That said, be wary of those who don’t. While every agreement is different, when you commit to listing with an agent, you also commit to paying their commission which typically runs about 6% of the final sale price. You will own the agent this amount, even if you sell the property on your own to someone you know. In addition, some agents will charge you for administrative costs, listing fees, marketing, listing sites, photography, and more. Make sure you know exactly what’s included in your listing agreement as no two agents are the same.
At The Closing Table
Once the closing date comes around, in addition to paying your agent, you will also have to come up with the closing costs. You can usually estimate this to be approximately 2% of the final sale price. The closing costs include things like appraisal fees, taxes, deed recording, title search, credit checks and more. With a direct sale to BluePrint Cinco, all of these costs are covered for you.
Time Is Of The Essence
When you list your house, you are in a sense, gambling. You aren’t offered any guarantees such as how much you will get or when the house will close by. This can make it difficult to plan ahead and move on with your life. In addition, you will have to continue paying the monthly costs for the home such as insurance, taxes and monthly utilities. An agent can list your house for any price they want, however, that doesn’t mean you will get it. With a direct sale to BluePrint Cinco, you will be able to know the exact amount you will receive as well as the closing date before signing anything. We aim to make the process as clear and as simple as possible.
Miscellaneous Expenses
The HUD-1 settlement statement is the breakdown of all expenses and payments made during the transaction. Anyone that has ever bought a home before knows that there are several miscellaneous expenses in every transaction. Before your loan even goes into underwriting you are on the hook for the inspection and appraisal fees. Added up these can reach almost $1000. You also need to make sure you take ownership with a clean title. If there are liens on the property they have to be cleared. This is almost always at the buyer’s expense but if they don’t have the funds to pay them off you they will fall on your lap if you want the property. You also have expenses for attorney fees, title search, title insurance, recording fees and specific lender fees not associated with origination fees. These fees quickly add up and can easily reach thousands of dollars. By law you will receive a fee worksheet before your loan is submitted into underwriting. This estimate will be within a few hundred dollars of the number you will find at closing. Don’t be afraid to question these fees or ask if there is a way to reduce them. You will be surprised to find what you can get simply by asking.
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