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Understanding the Costs of Selling Your Home

Selling your home is an exciting but complex process, and it's crucial to be aware of the various fees associated with it to determine how much you'll ultimately net from the sale. In this section, we'll break down the different expenses and considerations involved in selling your property.

1. Commissions:

  • Listing Agent Commission: Typically ranges from 2% to 3% of the sale price.

  • Buyer's Agent Commission: Similar to the listing agent's commission.

  • Total commissions usually amount to around 5% to 6% of the sale price.

2. Title and Escrow Fees: (approximately $5,000)

  • These fees cover the administrative and legal aspects of the transaction.

  • Escrow officers ensure a smooth closing process.

  • Notary fees (approximately $250) may apply if there is a mortgage involved.

3. Property Taxes, HOA Dues, and Insurance:

  • Prorations: Property taxes and insurance payments are prorated to cover the period up to the closing date.

  • Property taxes and insurance may be paid through an impound or escrow account, which accumulates funds throughout the year.

4. Home Warranty:

  • Sellers often provide a home warranty as an incentive to buyers.

  • The cost typically ranges from $700 to $1,500, with variations based on coverage.

5. Capital Gains Tax:

  • Capital gains tax may apply to the profit you make from selling your home.

  • However, there are tax rebates for primary residences: $250,000 for individuals and $500,000 for married couples.

6. Payoff Demand:

  • If you have an outstanding mortgage, the payoff demand represents the amount required to settle the loan.

  • It affects the net proceeds from the sale but not the capital gains tax.

Why Competitive Pricing Matters:

  • Pricing your home competitively can attract more buyers and potentially lead to multiple offers.

  • Bidding wars can result in a higher final sale price.

  • Well-priced homes tend to sell faster, reducing time on the market.

Consult a CPA:

  • Calculating your capital gains tax accurately is essential.

  • Consult a certified public accountant (CPA) or tax professional to understand your specific tax liability based on your income and home sale details.

Understanding the costs associated with selling your home ensures that you make informed decisions throughout the process. At UFS United Financial Services, our experienced team is here to guide you through every step of your real estate journey, whether you're selling, buying, or refinancing. Contact us today for expert advice tailored to your unique needs and goals.

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