It's Easy to Overlook Home Selling Costs
It's not that unusual for the typical Home Owner to get so caught up in the whole process of selling their home that they overlook doing some very important math. Lots of times the calculations are simply the selling price of the house minus the Real Estate commission. Many a homeowner has had to resort to maxing out their Visa's or Line of Credit a few day's before closing because of often overlooked, or grossly underestimated closing costs.
Your New Home Purchase
The majority of people selling a home will be buying another home to live in. However, there are some exceptions to this rule. Perhaps you'll be renting or establishing another form of living arrangement. If you're not going to be buying another property where you'll be able to "port" your mortgage to, you should contact your Mortgage Company well in advance of selling your home and get a written Mortgage Verification from them. This will outline the terms of your Mortgage, the present balance and the "Discharge" fee that will have to be paid on closing. If you simply want to move your current mortgage over to your new property, you'll still want to make sure that it's possible and be well aware of any costs that are going to be charged for doing so..
Legal fees and disbursements
A professional Real Estate Lawyer is the best person to make sure that you are protected in your transaction. Your Real Estate Lawyer will make sure that all of the terms in the offer are fulfilled, that all requirements set out by your Mortgage Company have been met and that the Buyer of your home has met all of their obligations. Your Lawyer will also make sure that your legal obligations are met as well. Legal fees do vary, so it's not a bad idea to contact your preferred Lawyer prior to buying or selling and find out exactly what the fee will be. Your Lawyer will also charge you for disbursements, which includes all of the expenses incurred in handling your transaction. These would include items such as courier, postage, searches, zoning verifications, photocopies and long distance charges.
Adjustments: Taxes and Utilities
Tax adjustments will really depend on how you pay your taxes. If you pay them monthly straight to the Municipality you live, the adjustment will be very minor if any. If you pay them along with your mortgage or if you pay them in accordance with the installments set out in your tax bills, there's a possibility that your taxes are paid in advance and the Buyer will have to reimburse you on closing.
Pre-Sale Home inspection
The majority of Home Buyers submit offers conditional upon obtaining a Satisfactory Home Inspection, but it can be very beneficial for a Seller to obtain a home inspection prior to putting their home on the market. The price for a home inspection vary's, but it may be one of the best investments you make. Not only will you be able to address any deficiencies that your property has prior to putting it on the market, you'll be reducing the chances that your sale will be complicated, or selling price reduced as a result of an After Sale inspection, because of issues you didn't even know existed! Read more about home inspections for sellers
Repairs and renovations
It's to a homeowners benefit to make sure that minor repairs are done to their house before it gets listed. After a careful review with your Agent, you should have a good idea if it's worth your while to even make some renovations prior to selling. Some renovations can actually return your investment in the value they add to your selling price. There's always some confusion by homeowners about what is an improvement and what is a repair, but the difference is clear. An improvement would be a brand new kitchen, a new bathroom, central vac etc. If you just replaced your roof because it was leaking, you can't really consider that an improvement, because if you didn't replace it, the value of your home would be greatly discounted. Most people expect a roof! There is no doubt that a home that has been well "maintained" will garner a much better selling price than one that needs a load of repairs. When you put your home on the market, try to address all of items that would have to be repaired or replaced in order for someone to live there. If you can't, then you may have to discount your price to better reflect the condition of your home.
Regardless if you're hiring professional movers or renting a UHaul truck, moving costs are another item that many people overlook. Make sure you include incidentals such as moving boxes, storage, insurance and days off work for moving.
It's really important that you don't underestimate the costs associated with moving. Once you have written down the costs for all of the above expenses and deducted them off of the ideal sale price for your home, you'll have a great handle on your finances. By doing this, you'll reduce your stress and make your move much more controlled and stress free!