Five bucks. That is about how much it costs at Home Depot for a 2×4 and a “For Sale” sign you can plant in your front yard. But five dollars won’t get you far in your efforts to sell your house. It won’t make your home more appealing to potential buyers or make them inclined to pay a higher sales price. It won’t fix the problems, make the repairs, or address the flaws that will turn buyers away. And it won’t spread the word about your home far and wide, arrange for open houses and showings, or help you negotiate and close the sale.
The reality is that selling a home quickly for the highest price takes time and effort – and money. That money not only covers non-negotiable costs like taxes and fees, but it also pays for the steps and services that you need to accomplish your goals.
But how much are we talking about when it comes to the costs of selling a home in Chicago? Let’s break it down.
Getting Your Home Ready For Sale
You want your house to appear in the best possible light when you list it. You also want to address any problems and make any improvements that stand in the way of that objective. Renovations can add significant value to your home, make it more attractive to potential buyers and, allow you to list it at a higher price. Similarly, professional staging can make your home appear larger, more open, and more appealing.
Before you list your property for sale, be prepared to spend money on:
- Cleaning
- Landscaping
- Home improvements, such as new paint, a new roof, or interior remodeling
- Replacement of old systems such as the furnace, water heater, air conditioner, etc.
- Repairs
- Renovations
- Staging
Obviously, the foregoing costs will vary depending on the current condition of your home. But understand that merely trying to sell your home “as-is” means selling yourself short.
Moving Out
You and all your stuff will have to get out of your home before your buyers move in. That means paying for professional movers and may also include the costs of temporary housing. If you’ve purchased a new house prior to selling your old one, you may also find yourself paying two mortgages simultaneously.
Closing Costs
There are hard costs involved in selling your home that you may have to pay regardless of whether you work with a broker or what you will pay in commissions if you do have a broker representing you. These include things like transfer taxes, escrow costs, title insurance fees, prorated property taxes, or HOA fees.
For example, with certain exceptions, the City of Chicago imposes a tax on all real estate transfers at a rate of $5.25 per $500.00 of the transfer price. Generally, the buyer is responsible for $3.75 of that amount, while the seller is responsible for $1.50. Title insurance may cost between $1,000 and $4,000, while escrow fees may be anywhere between $500 to $2,000.
Broker Commissions
An estimated 92% of American home sellers use a real estate agent to help them sell their home. It isn’t hard to understand why. Agent-assisted sellers sold their homes for an average of $249,000 compared to $190,000 for homes sold without an agent, according to the National Association of Realtors®.
An experienced real estate agent is your ally, advisor, and advocate from listing through closing. Their efforts include helping you determine the optimal selling price, advising you as to the repairs, renovations, and other pre-sale steps that will deliver the best return on investment. They arrange for the most impactful listings, with professional staging, photography, social media campaigns, and virtual tours. They conduct open-houses and in-person visits, negotiate with potential buyers, handle often voluminous paperwork, and address any problems when they arise. In sum, they take you and your home under their wing to get your sale closed at the highest price possible.
For those efforts, sellers pay their full-service agent a commission, typically between 5%-6% of the sale price. Discount brokers, who usually offer far fewer services, may charge a lower rate. Whatever rate your broker charges, they don’t get paid until you sell your home, so they have skin in the game when it comes to getting your sale closed.
Investing in a qualified real estate broker is more than worth it. Contact Z Chicago to learn more about how our knowledgeable and committed agents can partner with you to get from listing to closing at the best possible sale price.
