What is the Average Cost of Selling a Home in California
The average cost of selling a home in California seems to be high, and it looks like it’s only getting higher. Of course, home sales prices are up as well. Though there is talk about the market leveling out nationally, it’s hard to imagine that happening when you look around your neighborhood— especially if you live in or near counties like San Diego.
Sales prices on some of the nicer houses in the area appear to be constantly rising, not falling.
For those homeowners, you’re betting that whatever it might cost to sell is offset by the final price in the end.
That’s part of what you’re struggling with, however. You don’t have one of the nicer homes on the block, so you’re not confident you’ll come out ahead when you let your house go. Since you’d prefer to sell sooner rather than later—especially if market conditions do actually change— you know you’ve got to get a handle on the numbers so that you can make the best decision. That’s what we’re here to help you with.
The Average Cost of Selling a Home in California
That you’re already thinking about the fees you’ll have to pay when you sell your house gives you a bit more leverage than the average homeowner. Many sellers jump right in without looking first only to find they’re drowning in surprise costs just to get their home sold at a decent price. In the end, they usually end up with less money in their pocket—particularly when the home is a fixer.
Knowing the average cost of selling a home in California from the get-go, however, will help you prioritize what to take on from the beginning.
Ideally, it’ll help you determine what, if anything, you can let go of as well. Here are just some of the typical expenses you could face when you sell:
Cleaning and Removing Clutter
Preparing your home to be viewed by potential buyers always takes more time and money than most sellers realize, even when they choose to handle most of the work themselves.
Depending on the size of your house and how well you’ve been able to care for it over the years, you’re looking at investing anywhere from a couple of weekends to several weeks to thoroughly clean and remove all clutter. You’re likely going to spend a few thousand dollars, too.
The average cost for preparing a home to sell nationally is upwards of $2,500. That number includes everything from sprucing up each room inside to pressure washing the walls outside. It takes into account hiring services to cart off your junk and mow your lawn.
What it doesn’t account for is that the costs for basic goods and services in much of California can be around 20% more expensive than the rest of the country, according to data analyzed from the Bureau of Economic Analysis.
And, unfortunately, spending 20% more to clean and declutter your California home doesn’t guarantee you’ll get that much more from the sale.
To get top dollar for your home, you should plan to budget for a renovation. In California, however, you will pay top dollar for almost every repair, starting with the contractor you hire to manage the project.
All told, you can expect to incur somewhere between $20,000 and $100,000 worth of expenses on average, depending on whether a few pipes need to be replaced or if your foundation needs to be fixed.
Just the cost for an inspection to determine the full scope of work needed can run as much as $400—and that price doesn’t include the additional expense of checking for termites, mold, or lead.
Holding Off On Repairs
You can choose not to perform a rehab and wait to see what repairs potential buyers request. Just keep in mind that they will ask for something, including a significant price reduction.
Selling a house with foundation damage or other major issues is extremely difficult, too.
Not only do most buyers want a move-in ready home but most of their lenders won’t approve a loan for a fixer.
If you need to sell your house fast because you’re relocating for work or having trouble paying the mortgage, spending one to six months on repairs—or negotiating with buyers about performing them—may not be the time you have to give.
Hiring a Real Estate Agent
On average, you’ll pay 6% of your selling price in commissions for the service of a California real estate agent. Typically, this percentage is split between your listing agent and the agent who brings the buyer. It should cover all costs associated with marketing and showing your house, negotiating the deal, and handling the paperwork for the transaction, too.
It’s important to note, however, that some California real estate agents will ask for a higher commission rate or charge additional fees for marketing and admin duties. That may only add a few hundred dollars to your plate, but it could also cost a couple of thousand dollars.
Even at a lower percentage of your selling price, you’re looking at spending at least $10,000 in commissions. Though, in counties like San Diego, you can expect it to be out a lot more.
Closing with an Agent
Every home seller pays for costs to close the deal that aren’t included in their real estate agent’s commission. Though some fees, like those charged by the escrow company handling the transfer of funds, are split between the buyer and seller, your portion can still be pretty hefty.
Escrow fees, for example, will run you about $2.00 for every $1,000 of your home’s purchase price above the base rate that’s charged for their service. Everything from documentation and courier or wire transfer services will cost you extra, too. You may also be expected to pay for:
- Title insurance protects the buyer against liens and other encumbrances that can hinder them from taking ownership
- HOA document preparation and transfer fees
- A home warranty for one year
- Unpaid property taxes
- The Documentary and Property Transfer Tax, at an average cost of $1.10 for every $1,000 of your buyer’s purchase price
Combined with the commission fees you’ll pay to an agent when you sell your house on the open market, you could spend a total of 10% or more of your property’s selling price by the time your house is sold.
Your Costs and Selling Options
The costs above don’t even take into account what you might have to spend moving, too—including the amount of time and money you spend finding a new home, packing, renting a moving truck, and traveling—which can add up to a sizeable bite out of the final price you get for your home.
Once all of your expenses are accounted for, it’s possible you won’t end up with much at all—or, at least not as much as you expected.
And, with median home sales prices only creeping up by 1% in some California markets, according to Realtor.com, prices could start a reverse trajectory in 2020. That will be great for buyers who waited for a good deal, but not necessarily for homeowners who waited to sell.
It might be better to sell directly to a local all-cash buyer who can afford to absorb market risks and is willing to take your house as-is. In California, there is one who will charge zero fees and zero commissions to buy your home, too. They’ll even help you move.
Reduce Your Risk by Selling to a Cash Buyer Now
With the average cost of selling a home in California already high and the possibility that sale prices themselves may actually fall, even homeowners with nice houses on the block may question when and how they sell their homes.
For homeowners like you who either need to sell fast or simply can’t fix the house, cutting your expenses may be the only way to reduce your risks and increase your net profit.
That’s why, at Sell Your House Direct, we charge zero fees and zero commissions to connect you with one of our home buying specialists. We want to buy your house and pay you to cash fast, especially if it’s a fixer. And, we also understand you need to see the numbers—not just what’s average for California sellers, but what applies to your specific situation. So, we’ll prepare a document that outlines all of your costs and what you’ll actually net when you sell so that you can compare that with what we will pay.
It may surprise you to learn that you could get more money by selling quickly to us. What might surprise you more is that you don’t have to clean, declutter, hold inspections, or perform repairs to get a fair offer in the first place. In fact, you can just take what you want and leave the rest. Since we make it our business to provide above-average service, we’ll even help you move.
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