The Truth About How to Sell Your Home for More Money - 5 Hidden Costs of Selling Your Home

Selling a home in today's market is nothing like just handing the keys over to a landlord after leaving your rental. This market is extremely challenging and selling a home for top dollar requires strategy, it requires time, and it's probably going to require some money. And amid all the stress and emotional swings that homeowners go through when they're preparing their home for listing and when they're putting their home on the market, there are certain things they often overlook that end up costing them dearly. And in this video, I'm gonna break down 5 of those things so that you don't make the same mistakes that they do and don't sacrifice earning top dollar for your home. What's up everyone? This is Austin Klar, your lawyer turned real estate agent and real estate developer in San Francisco and Marin County. I've been a Bay Area resident for over a decade, giving me in-depth firsthand knowledge of what it's like to live and work there. If you're thinking about relocating or want more information about the San Francisco or Marin County real estate markets, definitely reach out to me. My contact information's in the description below. I will personally answer every call, every email, every text, and I'd be more than happy to help you. And if you like videos just like this, please subscribe to my channel and don't forget to click the bell so you're alerted every single time I post a video. All right, so this video's all about what it really costs to sell your home for top dollar in today's market. I see it all the time. Home sellers do mental calculations. I bought it for this. I think I can sell it for this. Here's how much I'm going to net after this transaction. They aren't thinking about all of the things that go into actually preparing their home for list in order to get that top dollar amount. And they don't think about these things and they don't do these things. It ends up actually costing them money down the line. So let's dive into what these costs are. The first cost of getting your home ready to sell is renovations and repairs. Getting a home ready to market is not just about cleaning the house up and letting it go. If you really If you want top dollar for your home in today's market, you have to be strategic about what things need to be repaired or renovated in order to attract the most buyers. What might have worked, you know, a year and a half, 2 years ago when interest rates were at their lowest of all time isn't going to work today when buyers are especially picky because of how expensive it is to buy. There's always going to be a balance between what repairs and renovations to do, how much to spend, what the return on investment is going to be. So that's obviously something that you need to talk about with your real estate agent so you can be really strategic strategic and not overspend and cost yourself on the back end. Now, when I say things like renovation, people get really scared and they think it's going to cost a ton of money, but there are actually a lot of little things that you can do that make a huge impact. They can be as simple as changing cabinet hardware to changing light bulbs to brighter hues, putting new flower beds outside to freshen up some curb appeal, or it could be the next level up in terms of cost and how involved the work is— repainting the interior or exterior of a home, or both, refinishing floors to make a space feel brighter. Or you could do all-out renovations like bathroom bathroom remodels, kitchen remodels, opening up walls. It really comes down to what your ultimate goal is, how much you have to spend, what's available to you, how much you need to earn or want to earn on the back end when you sell. What you end up doing is going to require very careful strategic planning, making sure that you balance the time and money spent on those items with the result that it's going to yield. The next hidden cost that sellers don't think about that actually can really help them get offers on their property are inspections. San Francisco and Marin County are a little bit different than other jurisdictions throughout the country. Typically in other parts of the country, even in California itself, when a buyer puts an offer in on a house, there haven't been any inspections done. There haven't been that many disclosures made. All that comes after you enter into a purchase agreement when you're in escrow. In San Francisco and Marin County, typical practice is for sellers to do all those inspections and disclosures upfront. Doing that work upfront might cost you an extra $600 to $1,500, maybe a little bit more depending on the size of the house. But having that information upfront actually enables you to minimize contingencies when people make offers. If they already have a home inspection because you're— the seller has already done it, then a buyer might not need an inspection contingency. If they already have all of the HOA documents for the condo ready to go and for people's review, then a buyer isn't necessarily going to need a contingency that is dependent on getting those documents. So By doing that extra work up front, by spending a little bit more money up front, a few thousand dollars for pest inspections, water and energy inspections, a home inspection, you're able to take care of those things and get rid of those contingencies most likely when somebody makes an offer on your home, and it means you can potentially close on that transaction sooner and get your money sooner. Now getting the inspections isn't just the end of it. There might be things that are disclosed in those inspections that you as a seller want to take care of to make your home more marketable. Is there a sewer problem or a plumbing problem, that was discovered? Did you learn that the fridge was inoperable or one of the burners on the stove was inoperable? There are things that you might wanna do that make the house more attractive to buyers. Not every buyer wants to move into a house and already have to do some work. So taking care of that upfront might actually increase your chances of getting an offer from a buyer, uh, closer to or even above ask. The next thing that a lot of sellers don't think about are disclosures. Just like inspections, typical practice in San Francisco and Marin County, the sellers take care of the disclosures up front, and those disclosures cost not only time but also money. It costs money to order a natural hazards report, a 3R Residential Building Records report from San Francisco. There are city-mandated disclosures and state statutory disclosures that sellers are required to fill out. Preliminary title reports, that costs money as well. Each of these things can range from $100 up to several hundred dollars depending on the situation. And some of these things a buyer may end up reimbursing you for. It all depends on how things are negotiated for in the contract, but these are things that sellers should be prepared to pay for upfront, and having those done upfront and available to the world to see for buyers to consider when they're making their offer will actually increase the likelihood that buyers come in and make an offer. Another important cost that sellers need to think about before putting their home on the market is staging. Staging is one of the most important pieces of marketing, and it's critical to giving buyers that perfect first impression. The first moment that they see photos on Redfin, Zillow, or wherever it is they're looking, staged photos make a bigger impact and give a better first impression and are more likely to get buyers in the door. There are a ton of studies out there discussing the benefits of staging, how staging can help you sell things faster and for more money. For smaller units like a 1-bedroom, 1-bath condo in San Francisco, it could range from between $4,000 to $7,000 for a 2-month staging contract. For larger properties, you know, depending on how luxe you want the furniture to be, You know, it can range from $20,000 to $50,000 for a couple months contract. It's gonna depend on the specific style, the specific furniture, and the specific property. But there is no doubt spending that extra money upfront will yield dividends on the backend because it'll get you a greater likelihood of getting offers in the door sooner and for more money. A lot of buyers don't necessarily have a vision when they enter into a space. So seeing how things are laid out seeing how the proportions work, how the scale of the room looks with a big king-size bed or a big couch really can help them envision themselves in, in a home. The last monetary cost that a lot of sellers probably think about, but it's the biggest one, are fees and taxes. And I'm not just talking about an agent's fees, but there are escrow fees, title fees, everything is open to negotiation. So there's something that sellers should be prepared for. There are also city transfer taxes, county transfer taxes that sellers will have to pay for, unless of course that's negotiated away in the contract. Maybe you've had the property for a long time and you're selling it for a lot more than what you bought it, you might have to pay capital gains taxes on it too. So when you're thinking about how much you're going to net from a transaction, it's not just what did I buy it for, what do I owe on the mortgage, how much am I getting back, but you need to take into account all the fees and all the taxes that are associated with it depending on the terms of your contract. And this is a little bonus one. It's not monetary, but it is really important. A huge cost of selling your home is time. If you're still living in the home, it's not vacant, then you need to make sure you are budgeting as much time as possible to make the home available for open houses, for broker tour, for private showings. You want to be as flexible as possible to allow the most buyers and agents into the home as possible. You also need time going over all the disclosures. It's going to take several hours to read through them and fill them out. You need time to go through the contract, figure out and strategize what the terms are of the offers that you get. There's a lot of time and effort that goes into preparing the home to list, actually being on the market, and then actually negotiating the contract and going through closing. So be prepared to make yourself available, make your home available as much as possible, because it's going to take a lot of time to get this across the finish line. And trust me, while it's a pain, the more time upfront that you put into this, the better off you're going to be as a seller, the less stressed you're going to be, the more prepared you're going to be for everything that's going to come at you. So it is totally worth that expense. Well, there you have it. Those are the hidden costs of selling a home in today's market for top dollar. If you're thinking about selling or want more information about the San Francisco or Marin County real estate markets, definitely reach out to me. My contact information's in the description below. I will personally answer every call, every email, every text, and I'd be more than happy to help you. And if you like videos just like this, please subscribe to my channel and don't forget to click the bell so you're alerted every single time I post a video.