At some point, you’ve probably wondered about how much money you could make in real estate. Maybe you’re thinking about flipping houses. Alternatively, you might just want to sell your current home and move elsewhere. Whether you’re an empty-nester or an aspiring real-estate tycoon, you should be aware of all the complexities beforehand. Selling a house isn’t as easy as some people make it sound. It isn’t as cheap, either. The actual cost to sell a house is far higher than many people realize, and every dollar you spend comes out of your eventual profits.
Remember: the operative word in the phrase, “get rich quick scheme” is scheme. There’s no such thing as money for nothing, especially when it comes to real estate. If you want to sell a house, you have to spend the money to attract buyers. You might have to make extensive repairs, and you’ll usually have to pay fees to a realtor or agency. This makes the actual cost to sell a house much higher than it may seem.
The Cost of Repairs
Before we even start to talk about new additions, let’s look at the costs of repairs. First, there’s the home inspection to consider. Yes, the buyer will usually hire an inspector of their own—but if you want to make sure that inspector delivers a glowing report, you’ll probably want to hire one first and fix anything they flag. The average price for an inspection is over $300, and of course, you’ll have to fix anything they find. Hopefully, you don’t have a termite infestation, which runs the average homeowner over $3,000.
If you’ve been living in your home for more than a few years, it may be time to make some upgrades. Two of the best ways to add value to your home and attract buyers, is to renovate your kitchen and bathrooms. Unfortunately these projects aren’t cheap, a bathroom renovation starts at around $2,000 and a kitchen renovation will run you more than $5,000.
The Costs of Working with Realtors
Let’s assume that you’ve done the work to repair and revitalize your home already. You still won’t be done with your expenses, though. There are also costs involved with the selling process itself. Consider the commission the agents will collect when the home sale closes—normally 5% of the sale price.
Alternatives to Expensive Home Improvements
It’s important to understand that there are other ways to sell your home before you take on these expenses. You can eliminate many of the costs associated with selling a house when you find a buyer who will take it in its current condition. Companies such as Professional Home Buyers buy houses as-is, and use them to create turnkey real estate investments. They often represent the fastest and lowest-maintenance approach to selling your home, since they also circumvent the need for a realtor.
There are many ways to sell your home, but not all of them require expensive investments or fees. Consider selling your home as-is, and you might find that the process is much less stressful than you thought it would be. In the end, if you still need to make improvements to your home, selling as-is to an investor may be just as lucrative as selling the traditional route.