What will it cost to sell my home?
The short answer is the cost of selling a home in Glendale Ca is between six and eight percent of your final sales price, outside of any necessary or negotiated repairs. I will break this down for you in just a moment, but most people actually want to know is…
After everything is done, how much will be left in my pocket?!
The best way to do is to start with a probable sales price and start subtracting. It is worth noting that the sales price is the easiest thing to manipulate. If you are unhappy with your net after finishing this exercise, read our article on how to get more money for your home.
Fixed Closing Costs To Sell Your Home
Fixed closing costs include mostly standard and normal procedural costs. These fees run about one to two percent of your sales price and even smart negotiating will have little effect on your ultimate net. In fact, the time delays, mistakes and lack of knowledge and experience of a bottom tier title or escrow service can be very costly. Normal items included in your closing costs are:
The purpose of title insurance is to give your new buyer the peace of mind that the title is “clean”. All of the previous monetary and legal issues are disclosed and/or covered. Title insurance fees are tightly regulated by the Department of Insurance – this cost will not help reduce your cost to sell a home. Instead, focus on knowledgable and experienced title reps with stellar customer service.
Glendale is a pretty straightforward city – there are not a lot of dramatic title related issues. However, older areas like Pasadena or Northeast Los Angeles have significant easement, lot line, and permitting issues. If your prospective home is on a hill with irregular lot shapes or in an area of older homes make sure you have a super experienced title rep and get your research done before you enter into a purchase contract.
Escrow is an important part of your home sale process. The escrow officer holds all of the money until the contract says it is ok to release it – you need to know that person won’t steal your money or release it to the wrong person! Escrow fees can vary widely, but this is not a good place to cheap out. Even the most expensive escrow company will not have a significant impact on the total cost to sell your home. Your entire fortune can literally be sitting in this person’s hands. Mistakes, carelessness, sloppy paperwork and more can destroy your net worth in a heartbeat.
Bank/ Loan Fees
Believe it or not, but your mortgage holder will charge you a fee to accept your money. It is typically a low cost, $30 – $75.
Prorated Property Taxes and Mortgage Payments
All money is prorated to the day of close. If you have paid your property tax bill and you close escrow before that period is done, the buyer will have to pay you back for the remaining time. The mortgage company will need to refund any money paid in advance.
Government Mandated Fees and Retrofit
County Transfer Tax for all properties located in the County of Los Angeles: $1.10 per thousand dollars of the sales price. The City of Los Angeles has an additional city transfer tax of $4.50 per thousand dollars of the sales price.
The State of California retrofit requirement includes proper seismic water heater strapping, smoke detectors and carbon monoxide detector.
Many cities also have additional retrofit and inspection requirements. Here are the most common ones for DIGGS Clients.
- Burbank requires low flow plumbing fixtures. No inspection or fee required.
- Pasadena requires a Pre-Sale Inspection and Completion Inspection. $27.78. If a property has self-disclosed unpermitted additions over 120 sq ft. or code violations a city inspection might be required, $150.38. In addition, homeowners are required to maintain their sidewalks. It is possible that a city inspector might attach a sidewalk assessment. The cost of the required work is unique to each property.
- Los Angeles (City) $15+ Los Angeles retrofit requirements include low flow plumbing fixtures, automatic gas shut off valve, safety film on floor level windows and sliding glass doors that are not tempered glass. A certified retrofit company must sign a certificate of compliance. $15 Fee plus Retrofit Company cost.
- Los Angeles (City). Residential Property Report (9A Report) $70.20
It is worth noting that while everything (except government fees) is negotiable, it is often easier to negotiate a higher sales price than to change what the other side assumes is “fair and traditional”.
Negotiated Closing Costs of Selling Your Home
Let’s address the elephant in the room. The commissions paid to Realtors is a large part of your cost to sell your home. You might assume the lower the fee to the agent, the more money in your pocket, right?
But the truth is agents can vary quite a bit in skillset and expected results. You are going to really dislike the next sentence, but you know it is true. You get what you pay for.
It is really difficult to figure out what you are paying for. Agents all seem to say the same things and look like they do the same things. If you can’t tell them apart, it seems reasonable to decide based on fee.
For now, consider the range of commission between 5% – 6%. That one percent difference can be a lot of dough, but a great agent can deliver far more in value.
Your home is not new and I know you intend to sell in “as is” condition.
It is still normal for your buyer to inspect the home and ask for costly repairs or credits. You have the option to deny the request, but practicality and fatigue often win out over dispassionate negotiating. Don’t let that happen!!
**pro tip** an agent who is experienced and skilled at negotiating repairs can save you big bucks in the end!
Side note: In the past lenders required certification that the property was free of wood-destroying organisms (termites et al) in order to close escrow. This is no longer a set-in-stone lender requirement and all of the work recommended by the pest control company is as negotiable as any other repairs.
Outstanding loans, liens, and judgments
All of your loans, liens and/or judgments must be paid off with the proceeds of your sale. Carefully review outstanding balances as well as the fine print regarding fees charged to close down the loan.
**pro-tip – Ask your agent to order a preliminary title report to identify all recorded liens and judgments.
How do I get the most money in my pocket?
Would you be surprised that closing costs for selling a home have the least impact on your net profit of selling your home?
You might save a few dollars here and there or, in the case of Realtor fees, a percentage point or more.
Saving money seems like a sure bet. Investing in great talent and strategic improvements to get a higher sales price seems like a gamble.
I obviously think I make a huge difference in my client’s bottom line, but you have no reason (yet) to take my word for it. So, consider this thought.
How much money are you willing to gamble losing by choosing the least expensive options?