Everybody needs a piece of the pie. That is the old saying that means in most business transactions of any worthwhile significance, the seller and buyer often pay various other fees so that multiple people or organizations get a “piece of the pie.” This is true even in small everyday transactions, we just don’t realize it anymore. For instance, buying a new shirt. The price you pay typically covers the state and local taxes, the profit for the store, the profit for the middleman, and the profit for the original manufacturer of the product. If this is true on the small scale, you can bet it is true of expensive transactions like home sales.
Expenses You Will Pay If You Are Selling Your Home
The pieces of the pie that you will likely give up if you sell your home in a tradition way can be large. These expenses can be a real surprise especially if you are new at selling a home. We want you to be aware of these costs and how expensive the pieces of pie you give up can cost. Here are some of the typical costs and fees.
A pre-inspection when selling your home while not required, is typically a good idea especially if you have an older home. According to Zillow, about 15% of home contracts fall through due to issues found by the buyer. These issues can be anything from roofing problems to electrical problems, to hidden mold or termites. A pre-inspection can give the seller an idea of anything that needs to be repaired or addressed ahead of time. This can expedite the sale and build trust with potential buyers keeping the final contract intact. According to HomeBlue, home inspection costs in Sioux Falls, SD range from $260 to $610 depending on the size of the house.
If you use the services of a realtor to sell your home, or even if you choose to sell the home yourself (FSBO) but sell to someone using a realtor, you likely will incur a commission on the sale payable to realtors involved. Make no mistake, realtors work for their commissions and their work on your behalf when selling your home can be valuable depending on the situation. Nonetheless, there is a fee involved. According to a study in 2022 and looking forward in to 2023, the average realtor commission in South Dakota is 5.66% which is several percentage points higher than the national average at around 5.35%. As an example, a house selling for $200,000 in Sioux Falls would likely incur realtor commissions of about $11,300.
If the housing market moves back to more of a buyer’s advantage type market as numerous professionals predict for the coming year, sellers will once again be in situations where they are required to negotiate for the sale of their home. In recent years, when the seller had the advantage due to the market, they could typically sell the home without any concessions for problems with the property. Buyers were so desperate for a place they liked, they had to “take it or leave it” for the next buyer standing in line. However, as the market begins to shift, sellers may once again find themselves reducing their selling price significantly for problems an inspection found with the property. While this is not technically a fee, it does cut into your profit.
Vacant Home Costs
If you’re in a situation where your property in Sioux Falls is going to be vacant for several months either for needed repairs or other reasons, there are costs associated with a vacant home as well as other potential problems and costs. Read this article about 6 major problems with a vacant house in Sioux Falls. You can plan to continue to pay property taxes, typically insurance rate goes up for vacant homes, there are still some heating and cooling costs etc. Additionally, if a major problem such as a leak goes undetected since no one is home, you could face added expenses even if just for an insurance deductible as well as added time to repair the problems.
Older homes typically need some repairs before selling. It could be the roof, the basement, the foundation, the plumbing, or electrical which can all be very costly repairs. Even a fresh paint, carpet and landscaping improvements can add up quickly as extra cost, as well as the extra time involved in getting the project done. If you decide not to make repairs, you can often expect to make concessions on your selling price or have potential buyers walk away because they are looking for a move in ready home buying opportunity.
Attorney Fees and Closing Costs
Typical legal fees and closing costs when selling a home are smaller compared to other fees. According to one study referred to on NewHomeSource.com, South Dakota has some of the lowest closing fees in the whole country. The average is around 1.08%. So, on a home sale of $200,000, you can expect to leave about $2100 at the closing table for closing costs and attorney’s fees.
As you can see, these fees add up quickly. When initially contemplating selling your home, you may only be thinking of the profit you’ll make because the value of your home has gone up since you purchased it. If you have a newer home, you will probably still make a good profit even with these various fees, yet you should still be aware of them and not be surprised when you see your profit dwindle.
An Option to Avoid Fees When Selling A Sioux Falls Home
Rocket Homebuyers in Sioux Falls can provide and option to buy your home as-is for cash. If the situation is right, meaning your home needs repairs, is older, needs clean up, or you need to sell your home quickly, Rocket Home Buyers may be a great solution for you.
Selling for cash to Rocket Homebuyers in Sioux Falls will save you realtor fees, potential repair fees, inspection fees, attorney fees, and closing costs. In fact, there are NO fees or commissions, no repairs, or clean up needed. And we can typically close the deal in as little as a week.
You can read more about how we work here. You can read reviews from some of our satisfied customers, and learn about our team here on our website. Give us a call today at 877-514-7355. We can make you a no-pressure offer on your property. You have nothing to lose except potentially extra fees on selling your home.