Buying a home and maintaining it is expensive, but selling it is also expensive, according to a new report.
It typically costs $54,616 to sell a home in 2024, according in a June 17 report from Clever Real Estate. Nearly half of home sellers surveyed, or 42 percent, said their selling costs were higher than expected, according to the report.
“When people think about selling their home, they think about how much money they’ll make from selling their home, not how much they’ll spend,” said Jaime Dunaway-Seale, data writer at Clever. Real estate.
“That cost ends up being too high, and then they’re caught off guard and frustrated because that’s going to cut into their bottom line,” Dunaway-Seale said.
In May, Clever Real Estate asked 1,014 Americans who sold a home between 2022 and 2024 about their attitudes about the home selling process. He also conducted an analysis of seller costs based on average property prices in May.
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About 39% of the total cost — $21,603 — is spent on real estate agent fees, according to the report.
However, with a landmark case dealing with estate agent fees soon to come into effect, sellers will no longer be required to pick up the entire tab. If a seller decides not to pay the buyer’s real estate agent’s commission, it could “drop their costs by about $10,000,” Dunaway-Seale said.
Other typical expenses include making some repairs to the home both before listing and in response to inspections, which Clever Real Estate estimates cost $10,000. closing costs ($8,000) buyer concessions or costs the seller agrees to pay for the buyer to reduce the upfront purchase cost, ($7,200). moving expenses ($3,250). marketing and advertising costs ($2,300); and stage costs ($2,263).
But home sellers should focus on “maximizing effidofailure of the transaction” and “not just trying to save costs,” said Mark Hamrick, senior analyst at Bankrate.
“After all, [with] many of these charges, there’s no harm in trying to negotiate, and that includes real estate commissions,” Hamrick said.
“There is a big cost”
Cost-constrained homebuyers in today’s housing market don’t want to inherit homes that need renovation, according to the Clever Real Estate report.
“There are a lot of expenses,” said certified financial planner Kashif A. Ahmed, founder and president of American Private Wealth in Bedford, Massachusetts. “You might need to do some renovations to sell it.”
If a buyer makes it all the way through the home inspection process and sees problems with the home that weren’t noticed during the initial inspection or disclosed, they may have room to ask the seller to make necessary repairs, Daryl Fairweather, chief economist at Redfin, said recently. on CNBC.
That’s especially true in housing markets where listed homes stay on the market longer because it gives home buyers “bargaining power,” according to Orphe Divounguy, senior economist at Zillow.
Sellers often undergo pre- and post-listing repairs, improvements and renovations that can cost around $10,000, according to Clever Real Estate.
“There could be a situation where a buyer might say, ‘Well, I want you to fix this before I buy it,’ and then you say, ‘Well, to get rid of this part … you’re going to spend the extra money,'” he said. Ahmed.
But the highest costs a homeowner will face when selling a home are real estate agent fees, Ahmed said.
“The rule change has not yet gone into effect”
A landmark case is set to change the way homes are bought and sold in the US
The National Association of Realtors in March agreed to a $418 million settlement in an antitrust lawsuit in which a federal court found that the agency and other brokerages had conspired to artificially inflate agents’ commissions for selling and buying real estate.
“We went ahead and included it [in the Clever Real Estate analysis] now because, as of now, the rule change has yet to go into effect,” Dunaway-Seale said.
A finalized NAR settlement goes into effect in August, and there is a “much clearer understanding that sellers are not responsible” for a buyer’s real estate agent commissions, said real estate attorney Claudia Cobreiro, the founder of Cobreiro Law in Coral Gables, Fla.
Commission rates have also been removed from the multiple listing system, or MLS, in some areas such as Miami, he noted.
The new mandatory MLS policy changes will take effect on August 17, 2024; according in NAR.
However, “that’s the political side of it,” he said. “The practical side of it is we still see the idea that they need Realtors,” and most buyers may not have an extra $10,000 on top of the closing costs and down payment required to buy, Cobreiro said.
Dunaway-Seale agreed: “Sellers may not be required to pay the buyer’s agent’s commission, but many of them are still just another incentive to bring in buyers.”
Ways to cut costs
A seller must pay closing costs. Everything else depends on the home seller’s priority or how quickly they need to sell the property, Dunaway-Seale said.
Here are some ways to reduce or reduce the costs associated with selling a home:
1. Sell without a real estate agent: Homeowners could try to sell the home themselves and possibly drop real estate services altogether, Dunaway-Seale said.
“But they’re not going to sell for that much profit,” he said.
Among sellers who didn’t hire an agent, 59 percent did so to save money, Clever Real Estate found. But sellers who worked with an agent sold their home for about $34,000 more than those who didn’t, according to the report.
Please note that making the transaction without a real estate agent can be a risk.
Signing the contract is the least. There are so many things that happen during the transaction that really require the expertise and navigation of someone who understands the process, Cobreiro previously told CNBC.
“You’re talking about one of the most expensive and consequential transactions of a lifetime,” Hamrick said. “These fees can seem a little scary, but the good news is that most people don’t get into it where they’ll actually lose money on the trade.”
2. Reduce concessions, setup and marketing costs: “If sellers aren’t really interested in selling their home quickly, they could potentially offer fewer concessions,” Dunaway-Seale said. Concessions are expenses that a seller agrees to pay to reduce a buyer’s upfront costs.
Lowering the budget for setup and marketing costs can also save costs because such tools help attract buyers, he said.
