Photo: Robert Clark
“Hidden costs” like carpet cleaning, painting and closing expenses can cost US homeowners thousands of dollars, according to a report released yesterday by the listing site Zillow.
And because many sellers in today’s housing market are first-timers, they may be unaware of the hidden costs of selling a house.
Nationally, homeowners may spend as much as $18,342 on average to sell their home in 2018. This total represents both the estimated closing costs ($13,357) and “basic home prep” ($4,985), assuming sellers hire professionals for these improvement projects.
Basic home prep includes carpet cleaning, interior and exterior painting, lawn care, gardening, home staging, home cleaning and local moving costs.
The average cost of these services can fluctuate wildly from metro to metro based on labor costs. Sellers in San Jose, CA pay $6,580 on average for home prep services compared to Dallas, TX sellers who pay an average of $3,270 for the same services.
Sellers spend more time prepping their home for sale than it will spend on the market, says Zillow. Some 78 percent of sellers make at least one home improvement prior to putting their home on the market.
“From decluttering and staging to pre-inspections, agents and homeowners often spend months behind the scenes prepping a home – well before it’s listed on the market. If you’re planning to sell this year, try to take some time to research what costs you may be responsible for and how they could affect your profit or even budget for your next house,” Jeremy Wacksman, Zillow’s chief marketing officer, says in the digital release.
Home sellers are responsible for paying both agent commissions and transfer or sales tax — two of the largest closing costs. And, since they are percentages of the sale price, sellers in pricey markets end up paying substantially higher closing costs.
For example, sellers in San Jose, CA — one of the hottest US home markets — can spend as much as $74,927 on closing costs alone (based on sales price of the median priced home) along with its high average basic home prep cost.
On the other extreme, sellers in Indianapolis, IN pay the least ($8,604) of the metros analyzed for the report, as Indianapolis’ median home values are lower and the state has no transfer tax.
Despite the hidden costs of selling, home improvements ultimately can help add value to the home and make it sell faster despite the added financial burden.
“Homeowners starting to think about selling should take time to research and budget for the projects that can ultimately help sell their home faster and at a higher value,” says Lucas Puente, Thumbtack economist, in the digital release.
Zillow and Thumbtack, a website and app dedicated to helping find local professionals “for any project,” co-authored the report — with Thumbtack providing data for home prep costs.
Click here to read the entire report.