4 Financial Considerations Before Selling Your House

Rather than shedding tears of happiness, many Americans have wept in frustration trying to sell their home. Zillow’s data on the stresses attributed to selling homes revealed that more than a third of Americans cried during the process due to stress. The majority of these individuals stated that the sale price of their homes was the main contributor to this. Alongside sale prices was the uncertainty of having buyers and the challenges of the renovation process.

If you’re thinking of selling your home, you may be faced with similar difficulties. To prepare yourself for any challenges, it would be wise to plan for the following financial factors.

Home Value

Before selling your home, it’s important to assess how much you can gain from it. We at Sold.com shared that the geographic location of your home is one big consideration. Case in point: homes in California typically cost twice as much as those in Alabama. On top of that, the size of your home is also a major factor that will affect its value. With these two factors in mind, you can estimate the value of your home through real estate websites. Look for nearby homes with similar square footage so that you can get a rough estimate of your home value. For a more accurate number, consider getting an appraisal to estimate the value of your home in comparison to other houses in the area. Meanwhile, real estate agents can also help approximate the best listing price for your home.

Renovation Costs

Speaking of your home’s value, you can raise its equity and worth by making the right renovations. Marcus’ article on home renovations states that the process costs about $10-$150 per square foot. However, you also need to include about 20% of the overall costs as a cushion for unexpected expenses. Since these changes can get pretty expensive, you need to focus on making improvements that provide the best return on your investment. These include kitchen and bathroom upgrades, landscaping, or even a fresh coat of paint. You can also look into popular renovation trends in your area to get a glimpse of the preferences of your potential buyers.

Realtor Fees

It’s not easy to sell a house, which is why it’s worth investing in the expertise of a real estate professional who can help you in the process. Though it may seem counterintuitive, you can earn more money by enlisting their help. Real estate agent Heather Hobrock states that an agent’s network and marketing reach can boost the selling price of your home. To illustrate, for-sale-by-owner homes sold for an average of $217,900 in 2019, while those handled by agents earned about $242,300. In return for this increase, you’ll only need to pay your agent about 5% to 6% of the total sale price. And this percentage will already be divided between the agent and their brokerage company.

Moving Costs

Once you’re set to sell your home, you also need to consider the various costs of moving out. The first thing you have to consider is moving supplies, such as boxes. Next, you’ll need to hire the services of a moving company if you don’t have any friends or family members who can help you out. This service has an average rate of $25 to $50 per hour, but it can increase if you’re moving away from the state or the country. On top of that, Bloomberg claims that you should also consider the personal or emotional costs of moving away. A study revealed that the average American is willing to forego a 30% increase in their income to stay close to their family members and loved ones. After all, commuting and traveling costs can also stack if you plan to visit your loved ones often.

The process of selling your home can be stressful and even expensive. To make the process as smooth as possible, consider your home’s value, the renovation costs, selling fees, and moving costs. By assessing the worth of these factors, you can prepare your finances for the entirety of the process.

Written for sold.com by Natalie Elise