December 2, 2024: Hidden Fees and the Cost to Sell Your Home No One Talks About
Selling a home can be an exciting journey, but it’s important to understand the financial aspects involved. Many sellers focus on preparing their home to sell for top dollar, but fewer are aware of the costs associated with closing the sale. Even if your home is in perfect condition and you choose to sell without a realtor, there are still expenses to consider.
Let’s break down the most common costs you’ll face when selling your home in Kansas City—and what you can do to ensure you walk away with the most money possible.
If you have a mortgage on your home, the balance will need to be paid off at closing.
- Primary Mortgage: This is your first lien, meaning it takes priority for repayment. The title company will wire the proceeds directly to your lender.
- Secondary Mortgage or HELOC: If you have additional loans tied to your property, these will also need to be paid from your proceeds.
To get an accurate picture of what you’ll walk away with, request a payoff balance from your lender. Your real estate agent can provide a net proceeds estimate to show how your outstanding balances will affect your final payout.
2. Taxes and HOA Fees
Taxes and HOA fees are often prorated at closing to account for the time you’ve owned the property during the year.
- Property Taxes: Taxes are typically paid in arrears (at the end of the year), so you’ll pay for your portion of the year directly from your proceeds. Don’t worry—your lender will refund any unused escrow funds to you after closing.
- HOA Dues: If you live in a neighborhood with a homeowners association, any unpaid dues or transfer fees will need to be settled. Sellers who’ve paid upfront for the year may even receive a prorated reimbursement.
If you’re unsure about your HOA obligations, your real estate agent and title company can help track down the necessary documents.
Title and escrow fees cover essential services to ensure your home’s sale is legal and secure.
- Title Insurance: This protects the buyer and their lender from any issues with the property’s ownership history.
- Escrow Fees: These cover services like holding funds, closing the transaction, and handling legal documents.
These fees are typically a few hundred dollars and are often split between buyer and seller.
4. Real Estate Agent Commissions
Agent commissions are often the largest expense for sellers, but they reflect the expertise and resources agents bring to the table.
- Listing Agent Commission: This is negotiated when you sign the listing agreement. It covers your agent’s time, negotiation skills, and marketing efforts, such as professional photos and advertisements.
- Buyer’s Agent Commission: This is often negotiated when offers come in. Offering a commission to the buyer’s agent can attract more buyers, especially those with financing but limited liquid funds.
Your agent should provide a clear breakdown of these costs upfront, so there are no surprises on closing day.
Some costs may arise during negotiations or the inspection period:
- Home Warranties: Buyers may request a home warranty, which typically costs $400–$600 for one year of coverage for major systems and appliances.
- Repairs: If the buyer’s inspection identifies issues, you may negotiate to complete repairs or offer a credit toward their closing costs. Contractors may allow payment at closing, which can be deducted from your proceeds.
Proactive sellers might consider a pre-inspection before listing to identify and address any issues early, potentially streamlining the sale process.
6. Judgments, Liens, and Delinquencies
Unpaid debts tied to your property must be resolved before the title can be transferred.
- Tax Liens: Any unpaid property taxes or other debts owed to the government will be deducted from your proceeds.
- Contractor Liens: If you’ve had work done on your home and haven’t paid in full, these liens must also be settled.
Your title company will handle coordinating these payoffs, and your agent can assist to ensure all issues are addressed before closing.
Plan for Success
Selling your home involves more than finding the right buyer—it’s about navigating the costs to maximize your net proceeds. By understanding these expenses upfront, you can avoid surprises and make informed decisions throughout the process.
At the Nelson Home Group, we specialize in guiding Kansas City sellers through every step, from setting the right price to negotiating terms and preparing for closing. We’ll provide a detailed estimate of your costs and work to ensure you walk away with the most money possible.
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If you’re considering selling your home in Kansas City, let us help you make the process smooth and profitable. Let us put Kansas City’s #1 marketing plan to work for you!
