Talk to anyone who’s just sold a home, and you’ll probably see some eye-rolling as they recount how the supposed profits were undercut by one expense after another. But by planning ahead, you can save yourself a lot of “surprises” and you may be able to even reduce some of them by doing some of them yourself as well
as getting multiple bids for other pieces.
There are two type of expenses – those that happen before the sale and those that happen at closing. This post covers the “before the sale” expenses. We’ll review closing costs tomorrow.
Before the Sale: Expenses to Expect
Here are the typical upfront expenses. Some are a matter of choice, yet may be important investments in making sure your house sells for the highest amount possible — or sells at all. (Save those receipts! If you might owe capital gains tax, your prep costs will be important in reducing your “gains,” as discussed below.)
- Painting. One of most cost-effective ways of freshening your house up, inside and out is a new coat of paint. If you’ve recently painted, this is less important — but if your color choices were bold or unique, you might want to tone them down with some crowd-pleasing neutrals. If you hire a stager (see below), they can help advise on the best colors.
- Window washing. Sparkling windows make a surprisingly large difference to buyer perceptions. When was the time you washed yours – especially on the outside panes of upper floors? Hiring someone will cost a few hundred dollars, depending on the size and height of your home.
- Repairs. Some repairs are necessary – replacing cracked windows or stained carpeting and some (such as major remodels) should be left for the buyer. But I’ve haven’t seen many houses that couldn’t use some quick maintenance to show that it’s well-cared for and it helps leave less fewer for a home inspector to comment on.
- Staging. It’s expected in some parts of the United States, and less known in others — but staging your home, or at the very least have someone help de-clutter, reorganize, and in some cases refurnish it after you’ve moved your stuff out, can help impress buyers in a big way. Expect to pay a professional stager a few thousand dollars for their services (a bit less if some of your own furniture is usable.)
- Adding decorative or new items to your home. Even if you decide to save money by staging your own home, you’re almost guaranteed to have to buy things like a new doormat, new plush towels for the bathroom, flowers for the showings, and more, depending on what your house needs. Other possibilities include new couch cushions, area rugs, a nice table runner, and artwork to replace your wall of kids’ photos.
- Curb Appeal. Buyers are very concerned with curb appeal. If your landscaping is already fully planted, you’ll want to either hire someone or put in some sweat equity to get it in shape. If the area hasn’t already been landscaped, plan to add some new greenery and flowering plants. Many sellers simply put in new sod — but do the buyers a favor and don’t leave the plastic mesh backing on it, in case the buyers want to replace it with something more interesting and environmentally friendly.
- Pre-inspection reports. We talked about this last week. Having a professional inspect your house for either termite/pest damage or other structural matters isn’t required , nor expected in most parts of the United States. Buyers expect to pay for their own inspectors, and in fact will probably want to hire ones they know and trust regardless of whether you’ve had the property inspected first. Yet there are situations where you might want to have the house inspected before letting buyers in — for example, if you’ve owned the property for many years and wonder whether any problems have arisen “below the hood” that you’re oblivious to, and would perhaps prefer to fix before buyers have a chance to get upset about them. Inspections will run you upwards of $200.
- Lights and heat while the house sits empty. If you’ll be moving out before putting your house on the market, expect to pay double utilities for a while. You’ll want to leave the lights and heat on in the house for sale, or program them to stay on during any hours that potential buyers and their agents may be stopping by the place. No one likes to enter a cold, dark house and fumble around for the light switches.
- Extra homeowners’ insurance for the vacancy period. Check with your homeowners’ carrier. Your insurance may not apply when the home is “vacant,” which term will be defined in your policy. You can ask for a rider to cover any period of vacancy. (In the current down market, many houses take months to sell.)
Check back tomorrow for the second half – what expenses to expect at closing!