You probably know the primary costs to sell a home: any updates or repairs prior to listing, commission to the agents for selling the home, and attorney's fees. But there are some "hidden" costs to selling your home that you many not be aware of, and the amounts can vary widely depending on the property.
You should also know that this post isn't here to scare you, but to offer further education so you can make the best decisions for you. It's my job as your agent to make sure you're as prepared for anything as possible, including extra costs that don't always come to mind. I'm sharing some of those costs in this post, but if you've experienced unexpected expenses that aren't listed, be sure to share them in the comments below!
Repairs During Due Diligence
This is easily the most common unforeseen expenditure, especially if the seller has opted out of a pre-listing inspection. The buyer's home inspection often reveals issues that the homeowner wasn't aware of and which need to be addressed. This is most commonly involving the electrical, heating and cooling, and/or the plumbing systems. Of course, issues needing attention are not limited to those three. While sellers legally don't have to make any requested repairs, it's typically in their best interest to handle the most pressing ones. It's my job as your agent to advise you as to which ones are pertinent and which aren't.
The amount of money a seller may spend on these issues varies widely. Sometimes, there are a handful of minor issues that can be fixed by a licensed professional in an hour or two and may only cost a couple hundred dollars. Other times, there may be a need for a system to be replaced, such as an air handler or condenser unit for heating and cooling. Those can easily run into the thousands. Each situation is different, which is why it's so important to have a trusted real estate agent guiding you through the process. (Especially one who consults with the appropriate experts for more information!)
Sellers can position themselves better in the market by having a pre-listing home inspection performed. This puts the power of knowledge on the seller's side, instead of waiting to be surprised by what the buyer's inspector finds once the home is already under contract. Also, having a pre-listing inspection that is shared with potential buyers puts those buyers at ease, because they have a more accurate picture of what they're purchasing from the start. This can lead to fewer negotiations and haggling over price.
Excise Tax
This is technically an expected cost due at closing, yet it doesn't come to mind all that frequently. Excise tax is a North Carolina tax that is assessed on the conveyance of interest in real estate. So, if you're selling a property that you own, you'll be charged this tax.
The rate is $2 per $1000 of value. If a home sells for $300,000, then the excise tax would be $600, and it's paid by the seller at closing. Unless your property is a luxury listing, your excise tax won't be that much, relatively speaking. However, expenditures can add up quickly, especially if you're making any repairs, so it's important to have an accurate picture of your costs prior to closing.
Unpaid HOA Dues, Fees, or Assessments
While conducting their research, the buyer's attorney collects information regarding the Home Owners Association governing the property, including dues and fees. If all dues/fees are paid, the buyer's portion for the remainder of the year is prorated and the seller is credited the buyer's portion at closing. If there are outstanding balances, the attorney will deduct the seller's prorated amount from the sellers' proceeds at closing.
If an association is planning to have new roofs installed on the buildings or change the light fixtures in the community's common areas, for example, and they don't have enough funds, they may charge homeowners a special assessment. If the assessment has been officially charged to the owners but they haven't paid it at the time of closing, the buyer's attorney will deduct it from the seller's net proceeds.
If you're concerned about surprise HOA fees, give your association president, manager, or treasurer a call to make sure everything's all squared away prior to listing the home.
It's important to keep in mind that each transaction is different and there's no way to know exactly how much it will cost you to sell your home. Your team, which includes myself as your agent and your attorney, will do our best to provide you with as much information in advance as possible!
This is not an exhaustive post, and some of the information may not be relevant to you. I'm happy to answer any questions I can, but there are some that only a NC real estate attorney can legally answer. If you have questions, please don't hesitate to get in touch. If I can't provide the answer, I'll connect you with someone who can!
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