Is it expensive to sell a house in 2021, or did the COVID-19 pandemic change the market? If you want to learn more, you’re on the right spot.
Coronavirus has impacted the world economy, and this includes the housing market. With the shortage of supply, many sellers have rushed to take advantage of the current situation and to list their house for sale.
However, what home sellers don’t realize is that selling their house the traditional way still costs a lot of money. While you can negotiate on some expenses, others can’t be avoided. Whatever happens, you will still have to pay a nice sum before you sell a house.
How Expensive Is It to Sell a House in 2021 in Milwaukee?
If you plan to list with an agent, you should count that all the fees will cost you around 10% of the sale amount, maybe even a few percentages higher. Here are some of the costs you should prepare for if you sell house in 2021.
Real estate agent commissions are among the highest of the costs homeowners face when you sell a house with a Milwaukee real estate agent. These commissions are based on a percentage of the sale price of your house. Typically, you will find the commission of at least 6% per side, so if you sell your house for $300,000, you would have to pay $18,000 out of your proceeds in commissions alone, along with the traditional seller’s closing fees and other possible transaction fees to the closing agent and the real estate agents office. Along with the commission are the traditional seller’s closing fees. You may possibly owe transaction fees for the closing agent and the real estate agent’s office as well.
If you didn’t already payoff your mortgage, you will need to pay to your lender so you’re no longer in debt towards them. Often times, your payoff balance will be higher than the amount of what you owe on your mortgage. It isn’t rare that it even gets higher than the purchase price! This is because lenders have a prorated interest on the mortgage. Your lender might even demand you to pay a prepayment penalty. This is done when you’ve paid off your mortgage loan before the agreed time. For example, if you have a line of credit or a home equity loan, you might have to pay them completely at the time of closing the sale. Make sure you’ve talked to your lender before the sale is over, so you know just how much you’ll be required to pay to the bank. Otherwise, when you sell a house in 2021, you may end up losing more than gaining.
Other Professional Fees
Professional appraisers and home inspector fees are also found among the traditional costs homeowners face when you sell a house in Milwaukee. When you use a real estate agent, the first step in the approval of a mortgage is the property appraising for enough to meet the terms of the loan the buyers have qualified for. Additionally, the buyer’s agent will almost always order an inspection of the property. There may also be fees for the closing agent handling the transaction, in addition to the closing costs you are already responsible for.
Title Insurance Costs, Transfer, Recording, and Property Tax Fees
Title insurance fees are another expense you have to count in your closing costs. Title insurance is necessary as it protects both the buyer and lenders in case there is something wrong with the title of your property. The seller has to pay for it from their own pockets. Usually, you’ll be required to pay the buyer’s title insurance premium.
Other that title insurance, you’ll also be requested to pay for transfer fees, recording fees, as well as property taxes. All of these are mandatory closing costs for homesellers. What are these taxes? Transfer taxes are imposed by the government (either state or local) that cover the costs of transferring the title from the homeseller to the home buyer. You can’t transfer the property ownership without this tax. The same goes for recording fees, which are charged by a government agency. They serve as a fee for registering a property purchase and making it a public record.
Together with these two taxes, you have to pay any property taxes you may owe. Otherwise, a sale of the house cannot be closed. For a homeseller in a financial distress, this can pile up when they attempt to sell a house in the age of a global pandemic.
Depending on the age of your home and the state of maintenance the property is in, it may be wise to have your own inspection performed, prior to listing. By being prepared ahead of time, a professional can help you understand just what you may be facing financially when you sell a house in 2021. If the inspector should find something wrong with the property structure, or other issues with the property that need repairs, they may require you to fix it out of pocket before the property closes. The potential costs can run into the thousands and become yet another expense homeowners face when you sell a house in Milwaukee with a real estate agent, possibly even more than the commission you’ll pay to the real estate agent.
Keeping a property which you don’t need and don’t live in means you’ll have to pay for things you don’t really use until the appropriate buyer comes. Homes tend to stay on the market for a long time even in normal conditions, let alone when there is a global pandemic slowing everything down. Sadly, while real estate agents are busy laying out all the plans to sell your home, the one thing they cannot guarantee is that your property will sell. This can lead to your home painfully lingering on the marketplace, which in itself becomes another cost homeowners face when you sell a house in Milwaukee with a real estate agent. Additionally, traditional house sales contracts usually include buyers meeting qualifications from banks, allowance for the mortgage underwriting time, and property inspection. Last but not least, your buyer may not end up qualifying, in the end, leading to starting your listing over again and an even longer period on the market.
Can You Avoid These Expenses?
Luckily for you, there is a way to avoid all costs associated with closing the sale of your property, and that is to sell a house in Milwaukee to a reliable direct buyer, such as Sparks Property Investors LLC. How is this possible?
Direct buyers don’t have a commission fee, and you don’t have to work with a realtor to sell to them. They’ll pay for all other closing costs, so you don’t have to worry about paying additional fees. If this isn’t enough, they’ll be able to close the sale much faster than traditional buyers – sometimes as fast as a week! Also, they’ll pay in cash, so there’s no need to waste time messing around with banks.
An additional good side to working with Sparks Property Investors LLC is that we’re buying houses as-is, so you won’t have to spend any money on repairs, updates, and cleaning costs. While the final offer will likely be lower than if you list with an agent, once you count in all the sale costs you’d be liable for, the final profit usually ends up higher if you work with us. This is why more and more homesellers in Milwaukee are choosing to sell a house to a direct buyer, especially in 2021!