What Does it Cost to Sell your Home?
Selling your vacation home can be profitable but there are some costs that come with selling property, even if the listing price is higher than what you bought it for. If you are thinking of selling your home property in Summit or Park County, contact Paffrath & Thomas. We can help you plan ahead and will work to find ways to reduce some costs that are associated with selling.
A few expenses to expect: see the list below of some of the most common expenses when selling property. Some are a matter of choice yet may still be influential upgrades in making sure your house sell for the greatest value possible.
Remodel & Updates
In order to sell their homes for more, some sellers remodel or update parts of their home to enhance its value. But before you spend thousands on a new bathroom, paint your entire home or put in a new garden, you should consult a Paffrath & Thomas broker who can advise you on the best ways to prepare your home for sale. Take a look at our helpful hints when you prepare to sell. When it comes to inspection items, you can take precautionary measures that end up may saving yourself a headache and a significant amount of money.
Title Company Closing Costs
Closing costs are inevitable, but who pays for what can b Title Company Costs can be negotiated between buyer and seller. These fees may include title insurance, recording and transfer fees, title company fees, wiring fees, and courier fees. Paffrath & Thomas can help estimate potential closing costs and negotiate with your buyer or seller.
Radon is an odorless, radioactive gas that is emitted from uranium deposits. Radon gases will typically seep through the soil to the surface, often leaking through small seams or cracks of the home. Given the natural geology of the Rocky Mountains we have a strong presence of radon and strongly recommend all of our buyers have it tested during the inspection process. If the buyer requests radon mitigation the seller will likely have to pay for it – although it is negotiable. In the event that radon gasses exceed the current legal limit, buyers will have the right to negotiate a mitigation system. Radon mitigation usually consists of a process called sub-slab depressurization. This process seals the home with an impermeable layer in the sub-floor and vents the toxic air away from the home.
Commision is the fee charged by realtors brokering the sale of a home. Commissions can vary by location and by situation. Different firms or realtors can charge different fees but as with most industries, you get what you pay for. Working with a knowledgeable Paffrath & Thomas broker will allow you to realize the ultimate profit for the sale or purchase of a home. At Paffrath & Thomas, we maximize your profits with unmatched teamwork, a proven marketing campaign and service that continues well past the closing table.
When it comes to selling your mountain property you may want to talk with your CPA about some of the tax advantages available to you. Take a look at our Investment Property page for more information. You may be an eligible candidate for a 1031 tax-deferred exchange. Call your Paffrath & Thomas broker today to see if a 1031 exchange would be right for you!
Depending on your situation you may have to pay off your pre-existing loan balance on the property. This pay off takes place simultaneously with your sale on the closing date.
Unpaid Property Taxes
If there are any unpaid taxes on the property they need to be paid at closing. The taxes will also be prorated proportionately for your term of ownership. There are two ways the amount can be prorated: Taxes for the calendar year immediately preceding OR by the most Recent Mill Levy and Most Recent Assessed Valuation.
In the towns of Breckenridge, Frisco and Keystone there is a 1% town transfer tax (a fee charged to sell your property). This tax is a negotiable item although it is most often seen as a buyers cost. There are also some subdivisions that will have a 2% transfer tax.
Outstanding HOA dues
In the event there are any outstanding HOA dues or fines these will be paid during the closing process.
If your property is currently connected to an onsite septic system, the county will require an OWS permit upon the transfer of property. The OWS permit consists of a full septic system service and inspection. Keep in mind an OWS permit is only valid for 6 months so timing of the permit is important.
Depending on your home we may suggest that you stage your property. This means setting up and decorating your home in a way that is more appealing to your potential buyer. Staging will often result in a quicker sale and a greater purchase price than a home that is not staged. At Paffrath & Thomas, we have professional contacts that can make different recommendations based on the property and your budget.
Capital Gains Tax
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria
- You have lived in the home as your principle residence for two out of the last five years
- You have not sold or exchanged another home during the two years preceding the sale
- You meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
We always suggest that you consult your CPA about any tax -elated exemptions.
Another cost to consider is moving costs. You may be leaving everything for the new buyer or taking it all with you. Instead of packing up boxes and renting trucks it may be worth paying for the deluxe treatment. This is where a company packs your boxes for you and transports them to the new location. Once again, you can count on Paffrath & Thomas to help find the right moving company at the right price.
A survey can reveal the exact property dimensions, size, and location of the home on the property, as well as any other improvements on the land, such as a driveway that may be crossing a property line. This is very important and a cost that the seller must be prepared to pay. A survey will tell the future buyer exactly what property they are paying for. Most surveys are required only for vacant land and single-family homes. There are several different types of surveys and working with a professional broker team will help you determine which is right for you.
We have witnessed tremendous growth in Breckenridge and the surrounding communities over the last several decades and we offer our sellers a perspective on this market that few other Realtors can match. Selling your property can often cost more than anticipated but keep in mind when you choose the right broker they will be able to help you achieve the greatest sales price, negotiate closing costs, and help organize the sale in a manner where you can retain the most money possible. If you are planning on using the proceeds from the sale to BUY A NEW HOME make sure you talk to a Paffrath & Thomas broker so they can help you gauge your approximate net proceeds.
Contact us today if you’re ready to sell your home!