Thursday, November 8, 2007

You Have to Spend Money to Make Money

Remember the old adage that you have to spend money to make money? Well, it certainly is true if you are planning to sell your home, especially in this market. They key word there is "planning". If you plan ahead, you will have a better sense of the scope of work and spending that will be required to sell your house. So, what are some categories of planning that you should budget for?

Inspections. You should have several inspections to make sure your home hasn't developed any problems that need to be disclosed. Some inspections to consider are pest/structural, general home inspection, sewer lateral, chimney, and roof. Keep in mind that you will need to include any inspections in your home's disclosure package. Inspections can cost you a couple thousand dollars, depending on what you schedule.

Repairs and Updates. Based on what the inspections turn up, you may need to have some repairs done. Perhaps you will need some work on the sewer or roof, or perhaps an update to the electrical system. It is hard to budget ahead for this until you get the inspections done. You may also want to consider updating features in the home, such as an out-of-date kitchen or perhaps adding dual-pane windows. A good Realtor can help advise you on what will make your home more attractive to the market, and how to do it in an affordable manner.

Staging and Landscaping. This topic has been discussed several times here before, but a home with attractive interior design and clean landscaping goes a very long way toward improving your curb appeal. Depending on the size and needs of your home, this can cost in the range of $2-4,000.

Commission. It might seem self-serving to bring this up, but this is how Realtors get paid. And, having a healthy commission available to the buyer's agent will likely cause more agents to bring clients through your home. The typical commission rate in this region is 5-6%. You might also want to consider an incentive to the Buyer's agent, such as a bonus. Commissions are paid at the close of escrow after the house has sold.

Closing Costs. There are many costs associated with the legal transfer of property, including transfer taxes. The standards for which side pays which fees varies from region to region, and this will typically come out of any proceeds.

The costs of selling a home vary drastically from transaction to transaction. If you would like help planning a budget & schedule for selling your home, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or

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