When selling your house you are supposed to make money, not spend money right? Well, while it is the goal of every home seller to turn a nice profit on their house, there are some expenses involved that might catch you off-guard.
As the saying goes: “it takes money to make money.” With that in mind, here are some of the common expenses that come with selling your house.
Maintenance and repairs
When you live in a house for years you tend to overlook some of the maintenance items that should be done around the house. But, when you go to sell your house you are forced to start addressing these issues.
The more “issues” that the buyer finds in your house the lower they are going to knock down the price they are willing to pay for the house. Therefore, when selling your house, you need to be willing to do the work that you have been ignoring for years.
While you may not recoup all of the money that you invest into the home, it could be the difference between getting an offer and not getting an offer. However, there are some instances, especially with larger repairs, where it might be worth it to you to just lower the price of the house instead of investing your time and money into fixing the problem.
Landscaping
Curb appeal is one of the most important things that home sellers need to worry about when selling your house. However, landscaping expenses can add up quickly as you look to add plants, trees, and flowers to your yard.
To save money, start your landscaping by cleaning up your yard and trimming shrubs. Once everything is cleaned up, you can start to see what you are working with. Also be sure to buy things that are in season and native to your area to make it as affordable and easy as possible.
Capital gains taxes
Every homeowner dreams of making a large amount when selling your house. But while that always sounds nice, it doesn’t come without expenses of its own.
If you are a single tax filer and make over $250,0000 on the sale of your house, or are married and filing jointly and make over $500,000, you will be required to pay capital gains taxes. If you make less than that you can take your profit tax free. Either way, it is always worthwhile to talk to an accountant to make sure you won’t be surprised when tax day comes hits.
Closing Costs
As a home seller you will have to pay the real estate commission that is on average 6 percent of the sale price of the house. Unfortunately, that isn’t your only expense at closing. There are other fees that will add up to roughly 2 percent of the sale price.
When you plan on selling your house it’s important to have a realistic expectation of how much money you will walk away from the table with. This is even more important if the money you make on the sale will determine what you can afford to buy for your next house. Plan accordingly and ask lots of questions to make sure you understand – and can plan for – what is coming.
