What Are the Closing Costs of Selling a House in Sacramento?
Selling your house can be stressful, and usually comes with a laundry list of things to do: packing, moving, and preparing yourself to live in new surroundings. But what’s even more stressful? Selling your house without knowing what the sale is going to cost you. Not only does this make negotiating in good faith nearly impossible, it also prevents you from gaining the upper hand during the first two weeks of your home’s listing—the time when you’ll get the most traffic. If you’re unsure about any of these numbers, we’ve got your covered! On this week’s Gage Group Home Selling Tips, I’ll show you exactly what it will cost to sell your house so you have all the information you need to make a smart decision. Knowing your bottom-line net walkway figure is essential because the most important number is not what your house sells for, but what you walk away with.
When you sell your Sacramento property, it’s so important to have an accurate net sheet up front, regardless of how much equity you have in your home. This net sheet will show you your bottom-line, walk away figure after closing costs and allows you to know exactly what to expect. It always surprises me at how many sellers list their properties without any idea of typical closing costs; if you don’t know these numbers, it will be very difficult to determine an acceptable sale price for your property. Make sure to ask your agent to prepare your net sheet for you before you put your house on the market.
For Example: I had a client that had purchased their condo in the mid-2000s, right at the peak of the market. Even though selling meant they weren’t going to make a profit on their property, they needed to move. When I arrived at the condo, I was surprised to learn that they were ready to fire their previous real estate agent. Even more surprising? The property had been listed on the market for over 250 days at a high price! The sellers also had no idea what the estimated closing costs were, and when I asked if anyone had prepared a net sheet for them, the answer was sadly no.
One question I had to ask them was, How are you able to make an educated decision on which offers to accept if you don’t know your total costs? It was something they had never though about in quite those terms; they were ready to bring up to $50,000 to closing just to sell their property and move into the suburbs. They had no idea that all they needed to do was lower their price and implement the right marketing plan. Even with a lower price, they were no way near having to bring in $50,000 to closing.
With the listing canceled, we waited a week before relisting to ensure the property was repositioned correctly with the right marketing plan in place. While we started with a price slightly lower than their original listing, the sellers were now aware of exactly how much money they would net based on a variety of sales price scenarios. With a reduced price, the property sold in just under 35 days.
If the seller had known the net number before they initially listed their property, they would have sold much faster and been on their way out of the city way earlier. I don’t have magical super agent powers, but what I do have is common sense. People should know what their bottom line is, and my job is to be upfront and tell them the truth.
So if you don’t want to end up like this example, here are some good estimates of what you’ll pay for in closing costs here in Sacramento.
Realtor’s Commission—Commissions should be around 5-6% of your sale price, depending on the agent. While a lot of people feel like the commission is an unavoidable burden of doing business, remember that a good agent can get you a sale price of 5-6% higher than your original asking price. In that case, there’s really no cost.
Title Fees—Most title companies will have fees ranging from $1,200 to $3,000, depending on the purchase price. In Sacramento, the seller is responsible for paying for the title insurance, and there will be other miscellaneous title fees as well.
Attorney’s Fees—While an attorney is not required in California, if you choose to hire one to help you with the selling process, be prepared to pay between $500-$700.
Survey Fee—If you’re selling a detached, single-family house, you’ll need to get a survey of the property done. In Sacramento, this will usually cost around $500-$750.
Real Estate Tax Prorations—As the seller, you’ll need to credit the buyer for their unpaid share of taxes. Since property taxes are always being paid a year behind, plan on crediting the buyer with a year’s worth of real estate taxes. While this isn’t really a cost—it’s a bill that you owe since you occupied the property during the time the bill was due—it will deduct from your bottom line.
Real Estate Transfer Stamps/Taxes—This cost will vary based on the county. Sacramento’s transfer tax rate is $1.10 per $1,000 of the purchase price, though certain areas charge .275% of the total purchase price.
Payoffs to Any Existing Loans—This is the amount to pay off anything owed, if there is still debt on the property.
These are the main costs associated with selling your home; while there may be additional, minor fees, the majority of them are included in this list. You’ll definitely want to know the total costs before you get an offer for your property, and make sure to contact me if you’d like an even more precise closing cost estimate on your home. I’m always happy to help!