Let’s talk about how to get the highest price for your North Carolina home
To calculate how much you can pocket in the sale of your home, you’ll need to know the costs involved in listing AND maximizing the value of our home.
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The 4 categories of investment
1. Repair / Improvement Costs
2. Preparation / Holding Costs
3. Marketing Costs
4. Closing+ costs
Repairs / Improvement Costs
When buyers see a cracked bathroom sink or an off-kilter cabinet door, they’re going to be wondering what else is wrong with the house. Our only focus here is just for buyers to be willing to (1) pay an acceptable price and (2) confident in the working order of the home. The amount you’ll be spending here completely depends on the state of your home, but here’s some basics:
- Remove carpet stains
- Fresh coat of paint on the walls
- Dents are professionally patched
- Appliances are all in good working order (if they’re not new)
- Toilets are properly sealed to the floor and flush correctly
- Exterior paint isn’t chipping
- Cracked windows replaced
- Doors close properly
This category is the one that usually yields the biggest blow to sellers’ asking price expectations. This isn’t just about broken HVAC or a known termite problem–it’s also about preventative maintenance. No homeowners wants to get stuck with a huge renovation bill 2 years after buying your home.
Think about it like this: you’re interested in purchasing a used car that has 82k miles on the odometer. This particular car statistically needs a new transmission at 80k miles. If the transmission has NOT been replaced but the car is still functional, should you plan on budgeting the cost to replace the transmission in the near future? The correct answer here should be, “Yes.” The next question is: is the value of this car the same as this identical vehicle but without any problems?
Home values are not so dissimilar. If there are no known problems with the house but the electrical work is from 1975, the plumbing is old cast iron, the HVAC is 8yrs old and the roof is 15 years old, a potential buyer needs to plan on “the car” breaking down soon and budget these upcoming expenses into the price they’re willing to pay. This is why this topic is so vital for maximizing home value.
Note about contract contingencies
An inspection contingency (different from a financing contingency which is required when a purchaser uses a bank) lets the buyer back out of the sale or negotiate a new price if needed repairs are discovered during an inspection. This is why it’s important to take care of the small and large repairs before listing your home. If you can’t come to an agreement with the buyer, the buyer has the right to back out of the sale, leaving you back to square one and re-filling out an updated Property Disclosure Form.
Upgrades / Improvements
Converting a 3 bedroom to a 4 bedroom, laying brick for the coolest backyard BBQ + fireplace in the neighborhood, or maybe converting the whole home into a smart house. Or perhaps consider homeowners looking for a passive income stream by converting the basement to a mother-in-law unit or constructing one in the backyard. These can be the difference in $10-$100k of additional home value.
However, improvements on your home don’t always require flashy, big ticket items. Sometimes, it’s as simple as removing a wall, new cabinet hardware and doing a tile job on your aging bathroom. The trick here is to know which improvements draw the greatest return on your investment. Sometimes super small upgrades to your home can be the difference in thousands of dollars in profit, so it’s best to consult with a great real estate agent that has a pulse on what upgrades will maximize the value of your home.
Part of every closing process is an inspection by the buyer. In a favorable case, the findings are minor and you can address them quickly. However, it’s not uncommon that these discovers are substantial problems to be addressed that perhaps you didn’t even know about.
In either case, the buyer will typically ask for some form of concession as a result, which is either a drop in the sale price or requiring you to cover the cost for those repairs out of your own pocket.
If you are looking into how to sell your home with or without a real estate agent, it’s not a bad idea to hire an inspector to examine the home before it’s listed to prevent surprises. This usually costs about $250-$650.
Preparation + Holding Costs
This one’s obvious and simple, but please don’t underestimate the importance of the correlation between a good clean with the price of your NC home.
If you hire professional cleaners, you can expect to spend between $300 and $800 for a deep clean, depending on the size of your home.
You might consider just doing this one by yourself so that you can get the details someone else may not care as much about.
If you need to haul large amounts of trash and old fixtures in this process, add an additional $400-$750 to this figure. Typically, you can hold a weekend garage sale and then find somewhere to dispose of the rest.
Manicuring Your Yard
A well kept yard, not to mention a designed landscaping, will substantially increase the value of your home.This is the first thing your potential buyers are going to see and will make them either fall in love with the house or decide to keep driving when they arrive at your open house.
The financial impact of landscaping your yard can range from 5.5 percent to 12.7 percent increase in the value of your home, depending on the type of landscaping and the home’s original value.
That translates into an extra $16,500 to $38,100 in value on a $300,000 home. So, how much does this cost? Well, if you do this yourself and keep it minimal, $500 to $3,000 worth of plants and materials if you’re willing to do the work and trying to keep things minimal.
But to maximize the value of your property, we hire professional/designed landscaping, which will cost us anywhere from $2500-6500 for a house. With the impact it can have on your profit, it is definitely something worth considering if you want to get top dollar and have the money to invest.
Staging is basically re-arranging some of your own furniture, renting a lot of other furniture and creating a showroom out of your home. If you’d like to get top dollar in your neighborhood, this is a non-negotiable. Buyers need to envision the potential of the home and WILL pay more when this is done.
When staging a home, 22 percent of sellers’ agents reported an increase of one to five percent of the dollar value offered by buyers, in comparison to similar homes. Seventeen percent of respondents stated that staging a home increased the dollar value of the home between six and 10 percent. The cost isn’t cheap though.
A consultation can cost between $300 and $600, and a three-month contract (standard) can cost up to $7,000 or more. However, because this enables you to get top dollar for your home, it is 100% worth the cost something you need to do to maximize the value of your home.
Once again, a great real estate agent will know EXACTLY what to do here and help you break down how to prioritize money in your home-selling budget.
(If you’d like to stage a home on the cheap, here’s 5 tips to DIY.)
Holding Costs + Storage
Whether or not you stage your house, a ready-to-sell house doesn’t have extra stuff in it. You’ll need to ensure the attic/basement is cleared out and cleaned, closets are cleaned/organized and most of your furniture needs to be put into storage. You can check the local storage units prices but it typically ranges from $50-200/month plus the added cost of moving the items to and from the storage unit, depending on whether you’re able to do it yourself or if you have a truck large enough to transfer it all yourself.
That leads us to Holding Costs. If you’ve already moved into your new home, you won’t need to pay for storage and moving your stuff back and forth. The bigger hole in your pocket are Holding Costs. This is when you are living between one of the two locations that are currently under your possession or only one of the locations is costing overhead prior to being sold. For us, this is all the costs of paying taxes, insurance etc for the single home. In your case, this means you have two mortgages, two sets of utilities, insurance, and property taxes. The trickiest thing is that you do not know when your house will sell, so it’s usually best to purchase/rent your next home after your house gets sold. Unless you sell your home for cash (what we do) or move in with your parents, Housing Overlap WILL occur, so it’s extremely important you budget some money for this.
Note about holding costs
One last note regarding Holding Costs: consider what happens when a buyer backs out of a transaction after an inspection or financing contingency. This makes it fairly tricky to decipher when and how to know whether to move into your new home. This is why it’s best to set aside at least 3-4 months of mortgage payments to pay double the costs in the case that you need to pay for 2 sets of house expenses during the sale of your house.
Photography + Videography
It’s 100% worth the cost of spending $500-$1500 to have a professional photographer come through to show the best version of your home. The nice thing about having a real estate agent is that they’ll usually cover this cost and make sure it’s done correctly, or get a discount for you with their preferred vendor.
The goal is to have the most amount of people viewing your listing. You can always ask your nephew to do this, but unless they specialize in spacial photography, it is almost always worth the price to pay the pros. It can be the difference in dozens of people who decide to come view your home.
95.1% of buyers first looked at pictures over everything else on a listing, which ultimately impacts the number of open house attendees and thereby, offers. Lastly, VHT Studio did a study that found listings with professional photography sold 32% faster.
This is a particularly difficult variable to accurately test against but you get the idea. In addition, a post-covid world means that most showings need to be done through video today as well. Consider having a professional videographer compile a short video tour through the home.
If you’re using a real estate agent, they will handle this and you don’t need to pay anything. However, if you’re selling FSBO in North Carolina, then you’ll need to cough up a few hundred bucks to have a realtor list your home on the MLS.
If you’re thinking of skipping this to just list on sites like Zillow yourself, please do yourself a favor and DON’T skip this. Why? Because 89% of buyers are represented by a real estate agent and they’ll cannot show their client your home if they do not know your house is for sale.
Real Estate Commission
The Seller of a home almost ALWAYS is responsible for paying both sides of the real estate commission, which is 6% of the sale price paid at closing. So if your home is sold for $400k, you will be cutting a check for $24,000 to your Real Estate Agent, which is then split between your agent and the buyer’s agent.
As we’ve discussed above (and as we discuss in How to Sell My House With a Real Estate Agent), this cost is 100% worth every single penny, especially if you’re working with a great real estate agent. They will add far more value to your home then this fee if you select the right agent.
Despite common misconception, even if you sell FSBO (For Sale By Owner) you’ll still be responsible for paying a 3% commission to the Buyer’s Agent, because 89% of all buyers are represented by an agent.
Sellers often pay 1% to 3% of the total sale price of the home in closing costs which ranges depending on how many of the following you are on the hook for:
- Prorated property taxes and HOA fees
- Attorney fees, if you have one
- Escrow fees, often $600-$2,000
- Title transfer tax ($1 per $500 levied on the value of the property; so a $300k home will have a $600 transfer tax)
- Title insurance, varies depending on provider and typically comes out of home sale profits
Note about property surveys
A property survey shows the boundaries of the property, any improvements that have been made to the property (e.g., additions, driveways, etc.), setbacks, easements and any encroachments affecting the property. In many cases, the buyer’s mortgage lender is likely to require that a new survey is conducted before buying the home if you do not have a copy of the most recent survey of the property. You might be able to find the original property survey in the city planning department, but if not, get ready to pony up.
Many home loans do not allow you to sell the house early without some type of prepayment penalty. There are different types of prepayment fees but in some scenarios, your bank will require you to pay 80% of the total interest you would have owed for the next six months. Federal laws have been passed which thankfully limit these prepayment fees from worse penalties and some new mortgages eliminate them altogether so that new lenders cannot charge a prepayment penalty, but check to see if you even need to pay this!
One-Year Home Warranty
A cheap but good cost to consider is a one-year home warranty to cover any major fixes the home needs over the next year. The rates for home warranties vary widely by house and location, but most sellers can expect to pay only between $300 and $900. Well worth the peace of mind that accompanies it.
Trust us.. if you’re going to list your house (and crush our hearts by not selling to us), then just do this.
Let's talk timeline
You’re halfway done.
So we’ve reviewed the costs involved. Now, it’s time to ask the next question: “How long does it take to sell a home?“
Click the link so we can walk you through the start to finish picture.
How about skipping the listing process altogether?
If your home is in good condition and a part of town we like, we might buy your home for market value.
If the costs of selling your home don’t make sense within your budget or you’d just prefer to skip the 6+ month listing process, reach out to us so we can provide an offer on the home.
We buy nice homes for market value on Terms and distressed properties for a discounted cash offer.