In a post-pandemic market, people are more inclined to invest in real estate due to the strong housing market. However, when selling houses, you must be aware of the costs that build up and combinedly eat up a good percentage of your profit. This blog post thoroughly analyzes all the fees and taxes associated with selling a house.

Listing Office Fee

The first fee you will have to pay is for the listing office. This organization lists your property on the market and makes it known that it is up for sale.

The listing office mainly asks for a 5% commission. However, a listing agent doesn’t get the entire payment. Part of this payment goes to the office for which the agent works. Half of the 5% commission also goes to the selling office, which we’ll discuss below.

Selling Office Fee

The selling office is the organization that brings a prospective buyer for your property. A selling agent differs from a listing agent, although you can save the costs by asking your listing agent to bring a buyer.

Since this is the person bringing a buyer interested in your property, 2.5% of the 5% commission charged by your listing agent is given to the selling office.

Transfer/Excise Tax

Transfer/excise or city/county tax differs between city and state. Therefore, there’s no set percentage of this tax. This variable tax depends on the property’s market value or purchase price. For instance, if your property is valued at $250K, you might have to pay $2.5 for every $500.

The city charges this tax in exchange for a mere piece of paper. Moreover, the city evaluates your property’s valuation again and charges higher property income tax.

Inspections

Inspections are required to ensure that the house has no concealed infrastructural issues that can ask for hefty sums later due to repairs. The property owner mostly expects these inspections, and buyers often ask for them.

If any major issue comes to light during this inspection, the property owner is expected to fix them before selling the house.

Staging

Buyers mostly need a staged property to understand how upgraded the property may look with all the furniture. Buyers can also evaluate how much space their furniture will cover and how open the house will seem. Hence, staging has become a massive advertisement trick.

Agents show staged properties around to attract buyers and show them a glimpse of their life in that property. Since staging requires all the necessary rental furniture for 2-3 months until the property is sold, the costs can be high.

Final Thoughts

Commissions and taxes combined with other charges can severely increase the cost of selling a house. Therefore, it’s better to find a buyer yourself or hold the property for another couple of years, especially in a high-inflation market. The low-volatility asset will give more returns than other assets.