It can be expensive to sell your home. Prepping to put your house on the market, closing costs, real estate agent commissions, and buyer-requested repairs can really eat into your profit.
But you can employ simple cost-saving strategies that will either save you money upfront or in the long-run.
Spend money on small repairs
Small repairs will cost you a little bit of money upfront (and some sweat equity) but can make your home sell for thousands more, so you’ll come out ahead in the long-run.
You might avoid completing large renovations such as a kitchen or bathroom — these pricey projects may not generate enough in a higher offer to justify it. But for little things such as an ugly paint job or a simple carpet replacement in the guest room, it can be a no brainer.
You’ve been a buyer before, so you may remember the feeling you had when walking into an immaculate home that needed very little done. You want to replicate this feeling for buyers touring your own home.
Sell as FSBO
Just like using a flat fee MLS service, homes listed as a for-sale-by-owner (FSBO) generally sell for less. In 2019, the median sales price for an FSBO was $200,000 compared to $275,000 for all homes sold, according to the National Association of Realtors.
If you’re simply going the FSBO route to save on commissions, don’t be surprised when you may still need to pay the buyer’s agent 3% of the sale price.
Generally, FSBOs can work great if you already have a friend or family member interested in buying your home. However, for everyone else, you may not be saving as much as you think, still have to put in a lot of work, and get less for your home.
If you can, DIY
If you’re a generally handy person and like doing projects yourself, you can save a lot by not hiring a professional for small repairs, staging, or decluttering. If this is you, make sure you plan ahead, as you’ll likely take longer than hired help, but you can certainly paint walls, deep clean, and stage your home yourself if you have the skills.
Busy people or those not already skilled at a task may want to DIY with caution. Nothing is worse than an unfinished or sloppily done project at an open house. In that case, buyers will certainly notice what stands out — and not in a good way.
Inevitably, a buyer will request some repairs after you accept their offer and they have the home inspected. Although you can always complete these repairs yourself, it may be best to hire a professional. Buyers tend to be picky with these items, and you may have to hire a professional if they’re not satisfied with your handiwork, resulting in lost time and money.
An agent’s commission can be a large chunk of the money you spend to sell your home. Typically an agent’s commission is 6% of the home’s final selling price — of which they give half to the buyer’s agent and keep the other 3% for their services.
Arguably, the commission is money well spent — an agent helps you set the best price, handles all the marketing, showings, and negotiations, and walks you through the legal paperwork to avoid getting into trouble later. But, that commission can still be hard to swallow, especially on a more pricey home.
The good news is that commissions are always negotiable (dofollow). An agent won’t always be open to negotiating their commission, especially if you’re working with a hard-to-sell home in a buyer’s market. But if you have a more expensive home in a highly desired area — or better yet, a seller’s market — they may be willing to decrease the commission percentage, as it should take less time for them to sell your home.
A flat fee multiple listing service (MLS)(do follow) is an option if you’re confident in your DIY skills. When using a flat fee MLS service, you simply pay for a broker to list your home on a local MLS that agents use to find homes for buyers. In most cases, however, selling your home by yourself using only flat fee MLS brings significantly lower offers.
Moving and holdover costs
Two costs often overlooked when selling your home are moving costs and holdover costs (note that this is a particularly important cost when considering house flipping).
Moving costs include renting a moving truck or crew, storage costs, and costs for staying at a hotel if you’re moving across the country. To save on these costs, consider moving yourself or price-shopping different companies. The season of your move may also have an impact on how much you pay.
Holdover costs are the extra costs you pay when in the process of selling your home and moving to a new one. You may have to pay two mortgages at one time, unless you are able to perfectly line up your closing dates. The same goes for utility bills, homeowner’s insurance, and possibly even real estate taxes.
You can help decrease these costs by attempting to keep your closing dates as close as possible. You may also look into a bridge loan to bridge the gap between your move dates.
Be prepared for all the costs of selling your home and make a plan for how to pay for them.
If you do your research early, you can often reduce the costs by price shopping, negotiating, or DIYing.