Do you really understand the costs of selling your house in the New Jersey area? Before putting your house on the MLS, selling on your own, or working with a direct buyer, read below to learn what costs you can expect to pay. You might be surprised at how the costs of selling can begin to eat away at your profits!
Selling a house can be an expensive ordeal. There are different types of costs both before and after the sale to be aware of. These costs can be particularly high, depending on your situation. In our latest post, we will dive into the costs of selling your New Jersey house using the three methods. Make sure to compare all of your options before selling your house in New Jersey!
Traditional Realtor Route
Agent Costs
This will vary based on the Realtor you choose to hire. Traditionally, expect to pay approximately 5% – 6% of the sale price to the agent before the other costs are factored in. Some agents will also charge you extra for some of their marketing (professional photography) and administrative services. Be sure you know what’s included before signing a listing agreement.
Marketing Expenses
After you’ve determined whether the agent includes marketing services in their rate, there are some marketing costs you should absolutely consider adding. For example, many sellers will hire a professional photographer to take pictures of their home. Having a professional photographer to take the photos of the property is an essential service that all experienced Realtors should provide. Some will even utilize videographers or drone service companies to get aerial shots of the property. You might also want to upgrade your online listings to “premium” so they show up at the top when people are browsing for houses in your area.
Repair Costs
Most houses will require a level of repair work before going on the MLS. This is essential to make sure the home inspection goes smoothly for the sale. Otherwise you risk losing buyers or being asked for large repair credits during the closing period.
Cleaning and Staging
Most sellers should have their homes professionally cleaned before putting it on the market. It is advisable that sellers should also remove personal belongings and clutter, storing all their unnecessary items elsewhere while the home is on the market. Some Realtors will recommend hiring a professional stager to come in help market the home in it’s best light. These can be other expenses that you hadn’t considered but may be necessary to sell your home.
Closing Costs
In a typical home sale, the seller will need to pay about 1% of the final sale price in closing costs. These costs are standard in New Jersey which includes the real estate transfer tax as well as miscellaneous title fees, but 1% is typically what you can expect to pay.
Carry Expenses
Listing your house with a New Jersey real estate agent may take a few months or even up to a year depending on the market. During this time, you will still be responsible for the property taxes, utility bills, homeowner’s insurance, maintenance, landscaping, and possibly a mortgage. When you add up all the expenses of carrying the house each month, it can amount to thousands of dollars.
Costs of An FSBO (For Sale By Owner) Listing
While trying to sell your house on your own will help you avoid commissions and agent costs, there are other costs to consider. In addition to many of the costs above, here are some additional costs to expect when selling your house in the New Jersey area.
Additional Marketing Costs
When listing your house, the addition of extra marking is at your discretion. However, when you are selling on your own, 100% of the marketing is up to you. You will have to pay for all online listings, printed materials, signage, and open house costs. You will likely want a professional photographer to come in to help you present the house in the best light. You can also opt to add things such as virtual tours or videos of your property. Understand choosing the right professionals for these jobs is on your time and your dime.
House Preparation Costs
Getting a house ready for a sale can take a lot of work. As with a listing, there are several things that will need to be done before the house is advertised for sale. This of course is if you want to give yourself the best chance to sell quickly for top dollar. You will need to thoroughly clean the house from top to bottom. You should make any needed repairs before listing the house and be prepared to possibly make more after the inspection process. Many sellers will also face storage fees for their unnecessary items, as well as the cost of a professional stager or decorator.
Time Costs
When you choose to sell the property on your own via an FSBO listing, you will find yourself spending an excessive amount of time dealing with the sale. You will need to be available for showings if you’re uncomfortable putting up a lockbox, create listings and marketing materials, respond to questions, process paperwork, handle negotiations and more.
Direct Investor Buyer
None
Generally, these type of cash buyers will offer a lower sale price depending on the condition of the home because they are in business to make a profit. However, there are no fees, repair costs, or closing costs. Essentially the costs associated with the other routes listed above you will not have to pay. If you add up the savings from these costs plus the amount of time and energy required, you may find it well worth selling to an investor buyer. Be careful to do you due diligence on these buyers, not all are created equal!