Sellers pay more than Realtor commissions: Title, transfer taxes, escrow and other fees have to be taken into account. (Property upgrade costs optional.)
The good news for home sellers – regardless of whether selling bungalow homes in Pasadena, mid-century modern homes in Mt. Washington or even a fixer-upper in Glassell Park – is that home valuation increases on average have been very good. If you have owned your home for even just one year the real estate data trends show the median sales price was up 10%, with the highest rate increases for two and four bedroom properties.
Add a few years of ownership in there and the increases – and incentives to sell now – are much greater. By the median sales price increases from 2000 to 2017, a home purchased at less than $200,000 will now fetch close to $700,000. Those are increases that do not necessarily correspond to property upgrades.
But there are selling costs involved of course, and it’s important to take into consideration all the costs involved when planning your move.
Here’s a checklist on transactional costs:
Home is worth $750,000 (sale price in 2017)
• Commissions for seller and buyer agents (6%): $37,500
• Escrow fees (base fee of $250, plus $2.50 per $1000 of sale price): $1875
• Title insurance: About $2000
• Transfer taxes: About $825 if the property is not in the City of LA, about $4200 if it is in the City of LA
• Required retrofits and inspection
o For properties in the City of LA - $70.20 for City of LA 9A report, $99 for the retrofit inspection, costs vary for the repairs needed (required retrofits include low-flow toilets and shower, water heater strapped for earthquakes, automatic gas shut-off valve, carbon monoxide and smoke detectors)
o For properties in the City of Pasadena – an Occupancy Inspection is required, which costs $149.69 (as of February 2017)
• HOA Documents (where applicable): $300-$400
• Home warranty: $450-$750
• Natural Hazard Disclosure report: $99
Not to be overlooked is that sellers also are due some refunds. Some sellers prepaid their property tax and HOA fees, which are refunded on prorated basis. The escrow is generally overestimated which could result in a refund at the close of escrow as well.
As for home improvements, homes for sale in Hermon, Garvanza, Eagle Rock and just about everywhere else will sell faster and for more if you first just clean it up: get rid of clutter, paint walls to neutral tones, spruce up the landscaping and rid yourself of most window treatments (unless high end and neutral).
If your home is one of the cheaper residences for the neighborhood – say, $100,000+ less than the houses flanking yours – but is not a tear down, it might be worth investing $10,000 to $25,000 in features such as paint, landscaping, decking or repairs. But your best investment is speaking to an experienced Realtor to read what those neighborhood valuations are and provide advice.
Tracy King has 25 years of experience in NELA – plus an expert and passionate team to back her up. That enables their agents to be familiar with the tangible factors found in fees and other closing costs, as well as the art of selling homes.
With over 30 years experience in helping clients buy and sell homes in Northeast Los Angeles, Tracy King has a depth of real estate knowledge that makes her the go-to for both the first-time home buyer and the seasoned real estate investor. When she's not holding open houses or negotiating offers, Tracy enjoys wine tasting, cooking, or planning her next trip to Paris. If you are looking to buy or sell a home in Northeast Los Angeles, contact the Tracy King Team at 626.827.9795 or firstname.lastname@example.org.