The Secret to Avoiding Hidden Costs
Selling a house can be a very challenging and expensive endeavor. However, it doesn’t have to be if you know how to avoid hidden costs and know the secrets behind those costs. For example, closing costs tend to be much larger for a city or suburban home than for a small town or countryside home. San Jose, California, currently comes in first with an average of over $83,000, and St. Louis comes in last at just over $10,000.
People often mistakenly think that selling to a realtor will get them the most money. However, they often don’t consider the commission fees of up $30,000 if they plan to take care of repairs before moving. If you go ahead and sell as-is, many investment companies are willing to buy any house for cash offers regardless of what condition it’s in.
Why selling to an investor might be the better choice:
-They don’t do commission fees
Commission fees are the biggest expense for home sales. They make up to six percent of the sales price on top of up to five percent closing costs. Depending on your location, this often means thousands or hundreds of thousands of dollars. However, investors don’t do commissions and often significantly reduce the closing costs. They also don’t charge more for repair services.
-No Loans or Mortgages Involved
Most layman buyers have to go through a process of taking out mortgages to be able to afford the home. Taking out loans is always a very uncertain process as different agencies and banks have different requirements. Some go as far as to require careful inspections and appraisals, which often requires the seller to make certain repairs and lower the selling price. Also, if you have poor credit, you’re usually out of luck. You don’t have to worry about any of that with an investor.
-You Close Much Faster
There are usually many requirements with realtors, such as inspections or repairs, before you can close. As a result, it can take up to a month to close with them. On the other hand, investors don’t inspect or require repairs since they buy homes as-is. Therefore, they can close in as little as a week or however much time it takes for you to get your stuff moved out of your old home and into your new one.
Since realtors show houses to potential buyers ahead of time, your home must first be show-ready. Then the next thing you know, a bunch of strangers will be parading in and out of it. If you’re a landlord who’s stepping down from taking rent from an investment property, you also may not want to make your tenants resent you by disturbing them.
Avoid unnecessary replacement and repair costs
You might think that every little thing needs to be repaired or replaced when you are selling your home, but this is not always the case. For instance, you probably don’t need to replace your carpeting. It is much cheaper to hire a carpet cleaning service and make it look like new.
It’s probably not a great idea to do major renovations to your home before selling as you are not likely to get the ROI you are expecting. Carefully think about what to fix and what not to fix.
With ever-increasing housing costs these days, having an investor buying your home as-is may be the better option for most people. It cuts down on the hassles of repair costs, and you don’t have to wait a whole month to close.