If you are planning on listing your house for sale in Los Angeles, there are many costs that you will incur throughout the entire sales process. These costs begin to add up before you even list your house, during the listing process, after you have received an offer and even when you are at the closing table. In this article, we will take a closer look at some of these costs of listing your house for sale, so you can get a better idea of what your net cash will be after the sale.
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Costs Before You List Your House
The costs of listing your house for sale begin before you even put it on the market. Before you even think about listing your house for sale, there are things you will need to do to prepare your house. Some of these things you can do yourself while others you may need to hire someone to help you. You may not need all of these, but they are included here for you to consider.
You want to do a deep cleaning of the entire house to create an appealing and welcoming environment for potential buyers. You can do the job yourself or you can hire a professional cleaning service to thoroughly clean the house, top to bottom. If you don’t plan on replacing the carpets, you will want to pay for professional carpet cleaning. Don’t forget the outside of the house! If you have a lot of windows that are out of reach, you might want to consider hiring a pro to wash your windows.
While you are cleaning your home, this is a good time to store away many of your unnecessary personal items. It’s not a good idea to have a lot of personal items or clutter when buyers are viewing your home. If you have a lot of items, you should consider storing them in an offsite storage facility until you move to your new location.
Repairs and Upgrades
Much of the costs of listing your house for sale will depend on what kind of condition it is in. You want to fix anything around the house that is broken or worn. This will include patching holes and painting walls, replacing tiles that are cracked or warped floorboards. You can also take this chance to make upgrades to your fixtures or hardware. Money spent on upgrades can definitely add value to your home. It’s just that some people feel uncomfortable spending that cash up front.
First impressions are important. The first thing that a potential buyer will see is your front yard. You can’t make a good impression if you have an ugly yard. Do whatever you can to increase the curb appeal of your house. You can trim foliage, add plants and colorful flowers or replace doors and fencing. Don’t neglect this area.
Costs While the House Is Listed
There are many costs of listing your house for sale while your property is active on the market. There are holding costs that you will have to pay and can add up the longer your house sits on the market. See: How to Find a Good Real Estate Agent
While your house sits on the market waiting for a buyer, you will still need to make many payments up until the day of closing. The most common are:
- monthly utilities
- homeowner’s insurance
- property taxes
- routine maintenance
Even if the house sits on the market for only a few months and then you have a 45-60 day escrow, this can add up to thousands of dollars.
There are agents who will do a great deal of marketing and there are those who will not. To successfully sell your house fast, at the very least you should have great looking photographs of the home. For a touch of sophistication, many people are taking advantage of the new technology and using drone photography to capture a “fly over” of their house.
Costs After Receiving an Offer
Once you have an accepted offer and open escrow, then the waiting begins. During this period, you will still be responsible for all the holding costs listed above. Depending on how quickly your buyer can get funding, a lengthy escrow could add months to your time frame and thousands of dollars.
The purchase agreement will be contingent upon buyer inspection. This is when the buyer’s inspector goes through every nook and cranny of your house and produces a report of everything that is wrong. You might find yourself back at the negotiating table with the buyer asking you to make repairs or reduce your price. The lender will not fund the loan if there are problems with the property.
The bank will order an appraisal of the property. If the appraisal comes in lower than your agreed upon sales price, then the buyer will request that you lower price. The lender will not fund the loan if the property doesn’t appraise at the sales price.
Costs at The Closing Table
Once escrow closes, commissions will be deducted from your proceeds and sent to your agent. These typically will be around 6% of the sales price which is usually the largest cost of listing your house for sale.
You will also see many other additional fees on your closing statement that are deducted from your proceeds. These fees include escrow, title, transfer taxes, prorated property taxes, filing fees and many more. This will cost you, on average, around 2% of your sale price.