Before purchasing a home, people often save up enough money for a down payment and then reach out to a realtor to begin the process of searching for a home. While this method works, many future homeowners are often surprised when they get to the closing table and realize that they are expected to dish out money to help close the deal. This article will discuss the different costs that are associated with a home other than the down payment and the mortgage.
First, if you are a current homeowner than expect to spend some money getting your current house ready to sell. When selling a home retail, it will be important to make sure that the house is recently updated and ready to sell. Realtors will recommend renovations for your house that will help your house sell quickly!
Speaking of realtors, expect to pay commission to use their services. While a good realtor can be worth his or her weight in gold, it is vital to understand that you will have to pay for the realtor services. Between the two agents involved in the situation, you can expect to pay 6% of the sale price in commission and this will be split by the home purchaser and the home seller.
If you move out of your house before you are able to sell it, then you must have a reserve in order to cover the costs of that home. This will include utilities such as heat and electricity. Trying to save money here can be a huge mistake. If you don't keep these utilities on after you move out, then you may come home one day to a burst pipe and then the costs have just been exponentially multiplied.
Last, but definitely not least, is the closing costs associated with a sale. When you sell a home, there will be many costs that you must pay for at the closing table so make sure you bring your checkbook. Calculating closing costs can be tricky, but budgeting and preparing can help you save money and plan for the future. Closing costs can be anywhere from 3-9% of the sales price of the house, which is usually split between both the buyer and the seller.
In conclusion, it is vital to plan appropriately when beginning the process of selling a home. Proper planning can prevent unplanned expenses and therefore help you maintain both your sanity and your credit score.