How Much Will I Make If I Sell My House In Colorado

How much will I pocket when I sell my house? Below are the steps for estimating the net proceeds from the sale of your house.

Establish the Value of the House

Usually, the fair market value of the house is set as the sale price of the house. The value of your house depends on the market conditions, type of property, location, and condition of the property.

The sale price is established by first having an appraiser assess the house. Then, your real estate agent conducts a comparative market analysis whereby they compare your property to similar properties recently sold in the area.

They also assess the real estate market conditions to determine a listing price for the house. The sale price can be slightly above or below the appraisal value, depending on the market conditions.

Calculate Your Preparation and Staging Costs

The main preparation costs involved in the sale of a house include:

• Appraisal Fees. As mentioned in the section above, you need to hire an appraiser to establish the house’s value. Their fees depend on the typical appraiser fees in your area, location, and condition of the house.
• Inspection Fees. Although a pre-listing inspection is not obligatory, it is a good idea to conduct one to identify any issues in the house that may make it more difficult to sell the house. Like with appraisal fees, inspection fees depend on the typical rates in your area, the location and condition of the house, and the type of inspection.
• Home Improvements and Repairs. Depending on the findings of the home inspection report, you may decide to undertake repairs and renovations to improve the value of the house and attract more potential buyers. Or you can opt to sell the house as is and disclose any issues to interested buyers. However, note that selling as is may lower the actual and perceived value of the house. A potential buyer will likely negotiate a discount on the sale price to cover the repairs.
• Home Staging. The costs involved in home staging vary from a few hundred dollars to thousands depending on the extent of staging. For instance, will you hire a professional stager? Do you need to move out of the house? Do you need to rent furniture for staging? Or are you staging an empty house?
• Includes online listing fees, professional photography and videography, advertising, flyers, posters, cost of hosting showings, open house, and house for sale signs. If you have a real estate agent, the marketing costs may be covered in their real estate commission, depending on your agreement.
• Homeownership Costs. You are responsible for paying for homeownership and maintenance costs throughout the period until the house is transferred to the new homeowner. These include property tax, mortgage payments, home insurance, and utility bills.
• Moving Costs. Whether you move at the beginning of the home sale or after closing, you will incur costs such as movers, alternative accommodation, and storage units.

Calculate Your Closing Costs

Closing costs are incurred in finalizing the sale of the house after you have gotten an offer and agreed to it. Closing costs include:

• Real Estate Agent Commission. It is usually 3-5% of the house’s sale price. According to the National Association of Realtors, it is typically the largest closing cost unless you have a significant tax on capital gains. Some people opt to sell the house alone to do away with the real estate agent commission cost. However, you have to take up the real estate agent’s work; it can be confusing and cumbersome if you are not very conversant.

• Attorney Fees. In some states, it is a requirement that a real estate attorney oversees the closing of a property sale regardless of whether you involved a real estate agent in the sale process. Even in For Sale By Owner (FSBO) scenarios or to a cash buyer, it is important to involve a closing attorney.
• Title Insurance. In most states, sellers must insure the new owner’s home title. It protects the home buyer from title-related claims.
• If you owe on property tax, you need to pay the amount owed before closing. Other types of taxes may apply, including excise, capital gains, and transfer.
• Other Applicable Closing Costs. Include home warrant, home seller concessions, HOA fees, and escrow fees.

Establish Any Debt Owed on the House

If you bought the house through a home loan, you would have to pay the remaining mortgage amount. Contact your lender to establish the exact amount you owe. 

Also, there may be a lien on the property by other creditors or the IRS if you have back tax. Contact your creditors to establish the exact amount owed so you can pay it off from the sale proceeds.

We have extensively covered how much it costs to sell a house. It is also worth noting that, on average, homeowners spend $20,871 more than their anticipated selling and closing costs, as some hidden costs come up during the sale process.