What does it Cost to Sell Your Home in Maryland?
With HGTV as one of the most popular tv stations, home selling and renovating is glorified as the newest fad. Everyone wants to be the next home “flipping” success and make lots of money doing so. One thing that many people don’t know if they haven’t sold their first home is that there are a lot of added expenses that they don’t talk about on TV. Many other factors appear in the cost to sell your home. No matter if you are:
- A homeowner looking to upgrade into something larger for your family
- A homeowner looking to downgrade into something smaller
- Or an investor looking to sell your most recently “flipped” beauty
There are added costs to sell your home that you must take into account before putting the for sale sign into the ground.
Most likely when you purchased your home the seller handled the costs for your real estate agent. This is usually not the case when you go to sell that very same home. Now, I can’t speak to a standard fee that you will be charged, that would be illegal. However, you should plan for Realtor fee’s to be a percentage of your homes value. This percentage goes to the listing agent who helps you sell, and buyers agent who represents the buyer purchasing your home. This is one reason some people decide that they want to be a For Sale By Owner. There is a lot involved in selling a home, and selling it yourself might save money, but you will give up a lot in that process. Stay tuned for an upcoming article with the pros and cons of being a For Sale By Owner.
Transfer Taxes and Fees
Another cost to sell your home are transfer taxes and fees. This category of expenses all depends on your location and sales price. In the state of Maryland transfer taxes and fees are often split equally between the buyer and seller.
For an example:
- If a seller has a home listed for $300,000
- Multiply the sales price ($300,000) by 1.6%
- Then multiply the sales price (in hundreds) 300 x 6.6
- Then divide the sum of those figures by 2
- This comes out to about $3,390.
These numbers will change depending on City, State and County rules. You will want to check with a local professional to confirm these numbers.
Mortgage Pay Off Fees
Before I meet with a homeowner to talk about their upcoming home sale I ask them what they still owe on their mortgage. With all of the added expenses this is one thing a lot of people forget to consider. If your home is currently worth $300,000 and you owe close to $280,000 you want to think twice on if you are prepared to bring a check to the closing table (since expenses might be over $20,000). This can be a difficult conversation, and as home selling specialists we want to educate our clients on every aspect so that there are no surprises. To complete the mortgage pay off you are also looking at around a $250 fee so that the title company can complete the mortgage pay off process.
Don't know what you home is Worth?
Read our blog article on “How to Determine the Value of Your Home”
Buyers Closing Costs
This category of expenses isn’t set in stone, and may not exist, although you should be prepared for them. In Maryland it is common for the homebuyer to ask the home seller to help pay for some of THEIR closing costs. Purchasing a home can be expensive, and some buyers need help in order to get to the closing table. Sometimes this expense could be as high as 3-4% of the sales price of your home. In negotiations you have lots of options including:
- Deny the request to pay some of the buyer’s closing costs
- Ask for an increase in sales price to compensate for the closing costs
- Accept the buyer’s request for closing costs and sales price
There are lots of options and your real estate professional is there to help you navigate through the tough waters of a real estate transaction.
Many people don’t factor in the repair costs when selling their home. Unless your home is being sold as-is (where the buyers cannot ask for repairs), you want to make sure you are prepared to pay for post-inspection repairs. Usually, when a buyer makes an offer and you go under contract, the buyer will conduct inspections. A licensed inspector is hired to make sure the property they are buying is safe and functioning the way it should. Depending on your home, it’s age, and where it is located, the types of inspections could include:
- Home inspection
- Termite inspection
- Radon inspection
- Lead inspection
- Well and septic inspections, etc.
In most cases the buyer pays for the inspections. But you should plan on receiving a list of repairs once those inspections are complete. The inspection repair list is what the buyers want you to take care of, in order for them to move forward with the purchase of your home. The length 0f this list depends on the condition of your home and the buyer. This list could include minor electrical or plumbing items. It could include a few major repairs. It could even include a two page laundry list of items that could cost you thousands of dollars. Again, your real estate agent will help you depict what’s important, what isn’t, and help you negotiate, so that the transaction can move forward.
Home warranties are a great “peace of mind.” Sometimes, it can be beneficial to offer a warranty up front. Other times, it can be used as an option during repair negotiations, post inspections. There are many types of home warranties and companies out there, but some of my favorites will include most of the home mechanics and appliances for under $500. As I mentioned before, providing a home warranty can be thought of as “peace of mind.” If something in your home is extremely old, offering a home warranty where the item(s) will be covered if they break can reduce your repair / replacement costs up front, and offer security to the buyer. That way they have a place to call if they need that item looked at for minimal cost once they move in.
All in all, there are a lot of expenses involved when selling a home and it is important to be educated on all of them before you list your home for sale. Please reach out to us anytime for any of your real estate related questions or needs!