The Amount Dave Ramsey Says Home Sellers Will Pay to Sell a Property Will Shock You. Are You Prepared for These Expenses?

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Dave Ramsey said selling a $300,000 home might come with $45,000 in expenses for a seller. Here’s why home sales are so costly. 

When you sell a home, you definitely want to make enough money to pay off your remaining mortgage loan balance. Ideally, you’ll also want to walk away with some profits that you can put down to purchase a new property.

As you do the math to figure out how much a sale will net you, it’s important to remember that there are fees you’re going to have to pay as part of the transaction. And, as finance expert Dave Ramsey pointed out, these costs can be much higher than you might expect.

Here’s how much selling a home could cost you

According to Dave Ramsey, a home seller can expect to spend about 15% of the sale price of the home in transaction costs. When you break that down, that’s a ton of cash.

“If you sell a home for $300,000, you might pay around $45,000 to cover selling expenses,” Ramsey explained. That $45,000 would include things like a commission for real estate agents, home closing costs, and moving expenses to relocate to a new property after the sale goes through.

Why is selling a home so expensive?

Spending tens of thousands of dollars to sell a home may sound ridiculous, but there’s a simple reason for these huge numbers. There’s one big cost that accounts for the bulk of this amount: commissions to a real estate agent.

Sellers have to pay a commission to their listing agent, if they have one. The industry standard is about 3%, although there are many discount real estate services that allow you to list your house for around 2% or even 1.5%. But, this is still a lot of money. If you are selling a $300,000 house and you pay 3% commission, that’s $9,000.

You also have to pay commission to a buyer’s agent as well, when you are selling a home. This may seem odd, but it’s the way the industry works. In fact, you will likely have to pay this commission even if you are selling your home yourself without having a seller’s agent.

Buyers who come to visit your home are going to have agents that expect to be paid — and if you want to put your house on the Multiple Listing Service, you must offer commission (the MLS is the primary database of homes for sale, used by most buyers and online real estate services).

The customary commission or a buyer’s agent is also 3%. And while you can offer less, this could potentially deter agents from bringing potential buyers to view your property, which you definitely don’t want.

If you end up paying 6% commission on a $300,000 house, this alone accounts for $18,000 of the costs Ramsey said to expect. Closing costs and moving fees can add up as well — although Ramsey suggested sellers may want to pay for an inspection or improvements and that’s not always necessary as buyers should be responsible for their own inspection and you can choose to sell the house as-is.

Ultimately, though, you need to be prepared to pay a lot of costs as a seller and you should take these expenses into account when setting your price and estimating the profit you’ll make.

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