Cervone Deegan + Associates knows that for almost everyone their home is their largest asset. That being said, when the time comes to sell you want to know its market value but also what costs are involved so you can forecast your potential profit. Here is a closer look at what you should expect.
One of the first things to do is to connect with a professional real estate agent such as ourselves to get an idea of what the fair market value is. This is the number you should expect to get near for a sale price, then you can deduct all of your expenses from it. Your core expenses will include:
-Agent commission. This is commonly 5-6% of the sale price which covers the professional services of facilitating the sale for both the buyer and seller side of the transaction.
-State Transfer Tax. This can vary by area so you will need to check the local rate. A common amount is about 2%.
-Closing costs. Attorney fees, deed preparation, wiring fees, and the like plan on around $1,000.
-Miscellaneous. This also can really vary depending on the home but you may want to budget around $2,500 to cover items such as small repairs and staging.
The above-mentioned are very typical and pretty standard closing costs. However, there can be some instances where there are more costs than just these. These may include:
-Buyer concessions. There may be a stipulation written into an agreement that the buyer will proceed with the purchase contingent upon something. This could be something like if the seller agrees to make a repair, replace a roof, or the like. Also, common for first-time buyers is if sellers will put money towards the buyer’s closing costs. These costs will also need to be factored in.
-Capital Gains Tax. Perhaps even more common in recent years with rising home values, capital gains tax is something you may need to pay. On the sale of a primary residence, a single homeowner can profit up to $250,000 on a home sale without a tax burden. Beyond that gains are usually taxed at a rate of 20%.
Finally, if you want to get even more thorough, especially if your next move is to a location far away, you may want to factor in your moving expenses for relocating.