When selling your home in Northern Virginia, there are some costs and expenses that you can anticipate. While most people understand the concept of closing costs, but they may be surprised by how expensive selling their house in Virginia can be. Between repairs, realtor commissions, settlement fees, moving, and more, your total expenses can easily eat up 10% or more of your home’s final sale price.
If you sell your home for $295,000 (the average home value in Virginia), you could end up paying upwards of $50,157 to make it happen. It’s true! While your actual out-of-pocket total will vary based on your particular situation, you should expect to pay 10% or more of your home’s final sale price if you opt to do a standard listing with a traditional, full-service realtor.
Let’s break down the different costs associated with closing.
Commissions are usually the largest expense. In the Northern Virginia market it is customary for the seller to pay commissions for both sides – buyer and seller. The final commission you pay will depend on who you hire, because commissions vary. They are typically around 2.5% on each side, though they are negotiable.
Settlement Fees are the fees charged by the title company to perform title research. They will also verify all financial information, prepare the settlement paperwork, perform the settlement with a Settlement Attorney, disburse funds, and record the deed and associated forms. While regulated, fees may vary somewhat from one title company to the next.
The owner also pays two types of taxes at settlement in Northern Virginia. One is a transfer tax and the other is called “congestion relief tax.” The seller should generally expect to pay about 0.25% in taxes alone.
Other charges that are bound to show up at settlement in Northern Virginia include inspections, warranties, and repairs as well as Homeowners Association Documents.
HOA Transfer Fees
If you live in a community governed by an HOA or condo owners association, you’ll likely be required to pay for a “resale package” to be delivered by the HOA or Condo Association to the buyer for review. HOA transfer fees are actually standard fees that may occur when a property is transferred from one owner to another. This can run between $50 to $300, though sometimes more in special cases. They are meant to cover the costs associated with preparing documents, handing out HOA’s rules to the new owner, dealing with property inspection records, changing names in the homeowner databases, changing security codes, creating new security cards, and other administrative costs. The association will probably inspect your home prior to sending the documents to the buyer, and should they note any violations or if any dues are late, you’ll need to take care of this before or at settlement.
Home inspections — including termite inspections, air and water quality — are sometimes paid by the seller, and sometimes by the buyer (consult your contract). Generally these run less than $75. Should the inspector find evidence of damage or irregularity, the seller usually treats or makes needed repairs.
After the home inspection, the buyer may negotiate with you to make some repairs to the property as a condition of sale. Buyer repair requests can range from felling a dying tree to putting on a new roof. More contracts fall apart at this stage than at any other, so having a real estate agent to negotiate this on your behalf is very important during this step.
Rarely, sellers will agree to pay for a home warranty for the buyer. This warranty means that the buyer is protected in case there is a needed repair during the first year of owning the home. Home warranties generally range between $350 to $550.
In the end, how much profit you walk away with at the end of your sale will actually depend on a variety of factors. One is whether you choose to sell your home using a realtor (recommended), for sale by owner, or with an all-cash buyer. Another factor is which repairs, improvements, and listing preparations you’ve chosen to invest in. You’ll also need to account for any concessions or offer incentives to your buyers.
Lastly, keep in mind that your mortgage balance is paid off with the proceeds from the sale at the time of closing, and in most case, your mortgage balance is the most significant expense. With the average person moving every 7 – 10 years, most homes are sold with a balance on their original mortgage.
And after the sale, don’t forget that there are the actual expenses of packing and moving! Selling a home can be expensive, but it’s an exciting process. Let Let With Elizabeth help you sell your home and get the most value from your property.