When it comes to selling your Park City property, there can be a number of associated costs that you may not expect. While most homeowners expect that some home repairs should be made before listing a home on the market, they may not have considered prorated property taxes, or selling in a buyer’s market, which can call for the seller to shoulder more closing costs.
If you are preparing to sell your home and aren’t sure what costs you should expect, let your Park City realtors guide you through eleven of the costs associated with selling your home.
1. Home Repairs Prior To Sale
Unless you have recently made repairs to your home, there is likely something that can be addressed before you put your house on the market. Maybe the kitchen cabinets can use a fresh coat of paint, or perhaps there are a few cracked baseboards that need to be replaced. Other repairs like having your hardwood floors refinished and sealed can make a difference when it comes to listing your home.
If you aren’t sure what is needed, walk through your home room-by-room and make notes of things that can be potentially repaired. You can always ask your real estate agent if these repairs are necessary or purely cosmetic. Though, cosmetic repairs can help potential buyers see your home in the best light.
2. Upgrades To Home
For homes that are not going to be a forever home, making upgrades—particularly expensive upgrades—should be done at least a year prior to when you plan to list your home. That way, you can enjoy the upgrades to your home yourself! Some of the key areas you can upgrade in your home that generally pays off in the long run, you can:
- Upgrade your kitchen
- Improve one or more of your bathrooms
- Add a deck
- Install energy-efficient windows
Depending on your home and location, different upgrades will make sense. Your realtor will be a significant help in navigating what upgrades make sense for your area.
3. Pre-Sale Home Inspection
Along with upgrades to your home, you may want to have a home inspection prior to listing your home. There may be unseen issues that will delay the sale of your home, such as a termite infestation or foundation problems, and it is best to get these taken care of before putting your home on the market.
Also, by having a home inspection already completed, potential homebuyers can feel more confident moving forward in the purchase process.
4. Moving Costs
Whether you hire movers or manage your property move out yourself, there are moving costs associated with selling your home. Some sellers purchase a storage unit to contain their belongings during the selling process, especially if there isn’t a new property purchased yet.
Other sellers rent a storage pod or truck to fill up with their belongings. Depending on what route you go, there will be different levels of moving costs associated.
5. Staging Your Home
An empty home can be tough for homebuyers to see the real potential of your property. For many potential homeowners, they need to be able to visualize their belonging in the home. Instead of trying to keep some of your belongings in the home, you can have your property professionally staged.
You can find your own home staging company or ask your realtor for assistance. We generally recommend asking your real estate agent for assistance, as they likely will have reliable, professional recommendations for you to choose from.
Also, if your home remains furnished, you can still benefit from having it professionally staged. With the help of professional staging, your home can be shown in the best light, as it will be designed to highlight your home’s best features and freshen up the space.
6. Property Taxes
Even though you will be selling your property, it is expected that you will pay for the prorated property taxes you would owe that year. If you have already paid your property taxes for the year, you may be in the clear.
On the bright side, this is one cost of selling your home in Utah, your taxes will be prorated once the sale of your home is closed.money back. So, if you as the seller pays all of your property taxes in advance, you would be credited these costs at closing.
7. Realtor Sale Commission
When you hire a realtor to assist in the sale of your home, you receive a variety of services, such as marketing of your property, professional showings of your home, assistance with negotiations, title transfer, and many other tasks. Instead of paying the real estate agent upfront for these services, agents are commission-based.
So, after the sale of your home, you can expect your realtor to receive 6% of the sale price as their commission. The seller’s real estate agent and the buyer’s realtor will typically split this commission, which usually makes up the largest property seller’s expense.
8. Utilities Fees
Your home’s utilities should be maintained throughout the selling process. That way, your home can be shown to the best advantage with lights on and air conditioning running—or heating, depending on when you are selling your home.
This may mean paying for utilities at your current home as well as your listed home, if you have already moved out so that is something you should budget for as part of your seller fees.
9. Mortgage Payoff
Once your property is sold, the profits from the sale should first be used to pay off the mortgage on that house. There is sometimes an early payment penalty attached to paying off your mortgage ahead of schedule, so you may want to check and factor that cost into your calculations.
Along with paying off the principal of your mortgage, you may also have accrued interest as well. This amount generally is not what is shown on your last mortgage statements, so you may end up paying more than you expected.
10. Capital Gains Taxes
If your property sells for more than what you paid for it, capital gains taxes are applicable. For those who sell their property before the two-year mark, short-term capital gains taxes will apply, which is equal to your regular income tax rate. However, if you have owned the property for two years or more, long-term capital gains may apply.
With long-term capital gains, a single taxpayer can exclude $250,000 of capital gains, while married filing jointly taxpayers can exclude $500,000 in capital gains if they have not claimed this tax break in the last two years. However, the property has to also have been your primary residence for at least two of the last five years, which isn’t always the case with Park City homes.
It is important to speak with a tax professional to cover the tricky taxes that are associated with selling a home or property. We have local recommendations for those in need of help.
11. Closing Costs And Additional Fees
There are closing costs that are covered by both the buyer and seller; however, there may be negotiations for the seller to cover some of these costs depending on the market. In a competitive market, sometimes sellers will shoulder some or all of the closing costs and additional fees to help close on a deal.
These costs can range things like:
- Title insurance purchased for the buyer, while the buyer purchases title insurance for their lender
- Potentially homeowner association fees, depending on the HOA
- Transfer taxes
- Brokerage fees—generally paid by you, the seller
- Escrow fees for both you as the seller and as well as for the buyer
We can help you negotiate for what costs you will and will not cover. For more tailored assistance when it comes to selling your home in Park City or the surrounding areas, feel free to contact Jensen and Company. We can provide an estimated settlement statement to show the costs associated with a sale so that you can make educated decisions based on each offer.