Consider The Costs Of Selling A House Before Setting Its Price

Whenever it's time to sell your house you have to stop and consider the costs involved

. In fact, you have to know the cost of selling a house in order to determine a practical asking price. Computing how much commission you'll be paying an agent to list and sell your house, as well as the additional expenses will add up to the real cost of selling a house.

And if you are only calculating a real estate commission but leaving out other costs, you won't arrive at the most accurate information. Actually, it's nearly impossible to know the exact closing costs until you have the final selling price of the house and the scheduled date of closing. There are some expenses, property taxes and utilities for example, which change daily and must be prorated day-by-day. When you sell your home, don't hesitate to ask your agent for a settlement statement so you can get a basic idea of all the additional costs you can expect at closing.

Real estate agents normally charge a certain percentage of the sales price to cover all their work marketing and closing a sale. While it's true that the commission is very often the most significant cost of selling a house, it is certainly not the entire cost, and the total of all closing costs can take a big bite out of your equity at closing.

Legally, area agents are constrained from having any form of agreement that fixes a specific percentage of the sale price as a stated commission, but you'll find that commissions are very consistent in most cities. Six percent is common in some areas and it may be seven percent of the selling price in other areas. However, most real estate markets are very competitive now, so some agents charge even smaller percentages for partial services, and some charge a flat fee.

Take a look at a standard HUD-1 Settlement Statement, a hard copy or online, so that you can see a list of typical seller's expenses. You might even consider printing it out and discussing it with your agent or attorney. I assure you that taking the time to review a HUD-1 Settlement Statement will help you budget and plan for the cost of selling a house. You'll see that the agent's commission is just one of many items included as seller's costs in a sale. This official settlement statement is required for every sale of residential property, but rather than waiting to see it the day before of the day of your closing, try to see the form ahead of time because it's very useful for budgeting your expenses and costs on closing day.

by: Leo Kingston

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