How Much Does It Really Cost to Sell Your House in Orange County?
Are you a senior considering downsizing and selling your home in beautiful Orange County? In this guide, we’ll go through the costs of selling a home to help you make an informed decision.
Real Estate Agent Commissions
First up, real estate agent commissions. Typically, these are the biggest costs you'll face. In Orange County, the average commission rate is around 5-6% of your home's selling price. For example, if your home sells for $700,000, you might pay $35,000 to $42,000 in commissions.
This fee used to be split between your agent and the buyer’s agent. However, with the new rules in place regarding commissions you as the seller will negotiate with your agent for how much commission you will pay them, and each buyer's agent will now negotiate for their commissions individually.
This means that you the seller will have to evaluate each offer individually based on how much commissions the buyer's agent is requesting and make sure that your bottom line or the money that you put in your pocket is your primary focus.
Remember all real estate commissions are negotiable!
That being said, bear in mind, that a good agent can help you get a better price for your home and make the selling process smoother. With agents you usually get what you pay for so beware of agents offering deeply discounted services, they are either inexperienced or offering a lower quality of service.
Over the years we net sellers an average of almost three percent more than their asking price no matter what the market is, I'm fond of saying we pay for ourselves! So choosing the right agent is crucial.
Look for someone with experience in your local market and a track record of success. This means being willing to ask an agent to show you their record of sales and success, not just what their company or brokerage does. Don’t be afraid to interview multiple agents and ask for references from past clients.
A great agent will not only handle the paperwork but also negotiate on your behalf and in your best interest at all times. They will market your home effectively (this means having a plan), and guide you through each step of the selling process.
And sure, you could try selling your home yourself and save the commission, but an experienced agent will make things so much easier for you, get you a higher price, and you’ll end up with more money in your pocket. I’d say it’s worth it.
Closing Costs
Next, let’s talk about closing costs. As a seller, you can expect to pay around 1-2% of the sale price in closing costs.
These can include fees for escrow, title insurance, and transfer taxes. As well as HOA doc prep fees and any private transfer fees that your HOA might charge.
So, on that same $700,000 home, you might pay between $7,000 and $14,000 in closing costs. It’s important to budget for these expenses so there are no surprises.
Escrow fees cover the cost of the escrow company managing the transaction, while title insurance protects against any issues with the title of the property.
Transfer taxes are fees paid to the local government for the transfer of ownership. It’s a good idea to ask your real estate agent for a breakdown of these costs early on, so you know what to expect.
Home Repairs and Staging
Before putting your home on the market, you might need to invest in repairs and staging. So fixing up any issues, like leaky faucets or cracked tiles, can make your home more appealing to buyers.
Staging can be a game-changer. This involves setting up furniture and decor to make your home look its best, and can also help sell your home faster and for a higher price. It helps buyers envision themselves living in your home. You can hire a professional stager or do it yourself with a little creativity.
But staging doesn’t need to be expensive. Click here to read how you can stage your home for sale on a budget!
Consider getting a pre-listing home inspection. This can identify any potential problems that could deter buyers or be used to negotiate a lower price. By addressing these issues upfront, you can present a well-maintained home that’s ready to move into, making it more attractive to potential buyers.
Declutter, depersonalize, and arrange furniture to highlight your home’s best features. Sometimes, just a few changes can make a big difference.
The cost of repairs and staging can vary widely, but you might spend a few thousand dollars depending on what’s needed.
Moving Costs
Don’t forget about the cost of moving! Whether you’re hiring professional movers or renting a truck, moving costs can add up.
In Orange County, hiring movers can range from $500 to $2,000 or more, depending on how much stuff you have and the distance of your move.
Planning ahead can help you manage these expenses.
If you’re downsizing, you might also need to consider the cost of storage for items you can’t take with you. Downsizing can be a great opportunity to declutter and simplify your life, but it can be challenging to part with your belongings. Give yourself plenty of time to sort through your things, and consider donating or selling items you no longer need.
To save on moving costs, get quotes from multiple moving companies and look for discounts. Some companies offer special rates for seniors. You might also save money by moving during the off-season or on a weekday.
Capital Gains Tax
Another potential cost is capital gains tax. If you’ve lived in your home for a long time, it’s likely increased in value.
The good news is, if you’ve lived in your home for at least two of the last five years, you can exclude up to $250,000 of the gain from your taxes if you’re single, or $500,000 if you’re married.
It’s a good idea to consult with a tax professional to understand your specific situation. A tax professional can help you navigate the complexities of capital gains tax and identify any deductions or credits you might be eligible for.
They can also help you plan for the tax implications of selling your home and ensure you comply with all relevant tax laws.
Miscellaneous Costs
There are also some miscellaneous costs to consider. For instance, if you have a mortgage, you’ll need to pay off the remaining balance.
You might also have to pay prorated property taxes and utility bills up to the closing date.
These costs can vary, so it’s important to have a clear understanding of all the financial details before you sell.
Another cost to consider is homeowner association (HOA) fees if you live in a community with an HOA. These fees can sometimes be transferred to the buyer, but it’s important to know your obligations.
Additionally, if you’re selling a condo or townhouse, there might be special assessments to pay for community repairs or improvements.
Lastly, if your home has any liens or other encumbrances, you’ll need to address these before you can sell. This might include unpaid property taxes, contractor liens, or other debts secured by your property.
Bottom Line
Remember, when it comes to selling your home and downsizing, preparation and knowledge are your best tools.
If you have any questions or need help selling your home, don’t hesitate to call me at (714) 844-5696.