Did you know the average cost of selling your home can be as high as 10% of the final sale price? This can severely cut into your profit, which may already be low if you don’t have an expensive home or much equity. So how can you cut down on these costs?
Many people do not realize there are low-cost solutions. Read on as we tell you the cheapest way to sell a house.
Costs Involved in Selling a House
There are numerous costs involved in the sale of a home. Some are unavoidable and can’t be changed. However, by identifying them you can attempt to find the cheapest way to sell a house.
Closing costs involve paying for the administration that finalizes and legalizes the sale. A few examples of these are listed below and when looking for the cheapest way to sell your house, forgoing one of two of these can make a huge difference.
- Title policy
- Lawyer fees
- Transfer tax
- Property tax
- HOA fees
- Escrow costs
- Brokerage fee
Of course, some like taxes are unavoidable. However, you may choose to forgo brokers to get the cost down or renegotiate with others.
Real Estate Agent Commission
When looking for the cheapest way to sell your home, the real estate commission is one you should seriously look at. This can be around 5 to 6% of the sale price. For example, if you sell a home for $300,000, you are looking at $15,000 in commission alone.
This fee is then split between the buyer and seller’s real estate agents. Who will pay this can depend, though; in around 75% of cases, it gets paid by the seller.
When it comes to repairs, the cheapest way to sell your house is to go for an as-is sale. This is where you don’t do any repairs or renovations, thus saving you money. However, the trade-off is that you will get much lower offers for the home and it will limit the pool of potential buyers.
You may want to do a host of small repairs to the home before selling it to make it look appealing. However, during an appraisal, you may have major repairs that need fixing before the house gets sold. The best tactic is to get an appraisal yourself before putting it on the market, but this will also cost.
Staging the home can make it sell for more money and get you a faster sale. However, repainting, adding new flooring, and getting a professional to advise you will also add to the cost.
Selling Without a Realtor
The least expensive way to sell your house can involve going without a realtor. At 5 to 6%, it is an enticing prospect. Yet you must carefully consider it, as they often bring a lot to the table which can be well worth their fee.
Depending on the market, it may be possible to negotiate a lower commission. This may happen when the market is strong, with properties going quickly. As the realtor will have lots of work and money incoming, they may not mind taking a smaller cut.
The other alternative is to sell the home without a real estate agent altogether. However, this limits your access to knowledge, resources, and contacts the agent may have. It will take a lot of your time to organize the sale and market it, so if you are pushed for time and have a lot of responsibilities, this route is not advisable.
In addition, prices can soon add up so that the fee does not look that bad at all. Once you pay for listings, get legal experts to draft contracts, and such forth, you may find costs work out similarly.
Cheapest Way to Sell a House
When looking for the least expensive way to sell your house, the best method will depend on the property and your circumstances. Below are some of the main options available to you.
1. Online Buyer
Online buyers are companies that use software with sophisticated algorithms to get the correct value of a home. They will calculate prices for properties in the same area, adding other factors such as market factors and the condition. When they get the value, they will then make an offer.
These companies aim to buy and renovate a property and then either rent it out or sell it for profit. As this is their aim, you will often get an offer lower than the market value. However, they have several distinct advantages.
Offers are almost certain to be in cash. This means you don’t have to wait for buyers to get mortgage approval, which could take months. As they have the paperwork ready to go, you can have the sale and money in your bank very quickly.
Online buyers will also buy as is. This means you don’t have to spend on renovations or repairs. The home will be sold in its current condition.
2. Flat Fee Agents
A flat fee agent works by charging a specific rate for agent fees. If you have an expensive home, then this can save you a lot of money compared to a percentage deal.
The downside is that you need to do your research. You can find flat fee agents that won’t compromise on the services they perform. However, many will offset it by providing a skeleton service.
For sale by owner (FSBO) is the route you take if you will do all the work yourself. This involves marketing the home, showing it, and negotiating. You can use several online platforms to sell and advertise the property.
An alternative method is to get partial assistance. This is where you pay an agency a flat fee for your home on a Multiple Listing Service. It then becomes accessible to agents across the country and you only need to pay a fee to the buyer’s agent, reducing costs considerably.
4. We Buy Homes Companies
A company that buys homes often has the same goals as an online cash buyer. They are local outfits that will offer a cash value for your home as is. This is lower than its market value, with the payoff being that you don’t need to pay fees or renovate and you get a very quick sale.
If considering one of these companies, do your research. You don’t want to get scammed by fly-by-night companies. Make sure you find one that has good reviews and operates locally.
5. Owner Financing
Selling a house with owner financing allows you to gain a recurring income. You give the buyer a loan, which they pay back in monthly amounts. You essentially become the mortgage provider, operating as a private lender.
There are a few legal stipulations for doing this. The home must be completely owned by you, with no mortgage outstanding. You should also perform all the due diligence a bank would do by checking the credit ratings of those who want to loan from you.
You may find this works best with low-priced homes, as some banks refuse to give loans on properties below a certain value. By working it right, you may be able to get a good interest rate and make a sound investment from the loan.
Home Selling Tips
Depending on the route you take, there are a few real estate tips that can help you sell without breaking the bank. Below are the most important.
Know the Market
There are two types of market: buyer’s and seller’s. In a buyer’s market, there are lots of homes for sale but few people buying. This means as a seller, you may have to make concessions to get a sale and entice prospective customers.
One of these may be pricing the home to sell. If people are getting a deal, they may be more likely to buy. However, this could be at a cost to you or the final offer.
In a seller’s market, the opposite occurs. This is when there are lots of buyers but few properties. It is in this market you can tend to make more financial gains, refusing to do certain repairs or negotiating to reduce fees.
If you are going to do repairs and renovations, then keep a level head. Set a budget, and remember you are doing them to sell the home, not for your personal preference.
After this, look at appliances. Make sure you fix any broken ones or replace them. Any remaining budget should get spent on repainting and replacing fixtures.
Selling Your House Quickly
Now that you know the cheapest way to sell a house, choose the method that is most suitable for you. When you have a small budget, stick to it. If you also need speed and convenience, consider an iBuyer.
iBuyers will provide instant offers on your home. If you want a hassle-free solution from a trusted company then look no further. Submit your address for a no-obligation valuation on your home.