Inevitably, the main question we’re asked when we begin a listing presentation is: How much will I get for my home?
That’s straight-forward enough, and a quick answer could be whatever someone pays for the home. Determining that price is another step, where we arduously review the local market, compare recent sales of similar properties, analyze the current market (Are prices on their way up or down?), and examine the competition, among other things.
Still, there’s another aspect of this process, and for sellers it could be most important. It’s not just a matter of how much sellers can get for their home; it’s a matter of how much sellers will net after all expenses and bills are paid at settlement.
Obviously, there are some costs related to selling a home, but often times a few charges, taxes, or fees find their way into the final selling disclosure and catch sellers off guard. That’s why we wanted to arm you with as much information as possible if you’re thinking about selling your home.
Quick disclaimer: This isn’t an all-exhaustive list of every expense you will encounter when selling your home. Every home sale is different, and the costs can vary. This is just a quick guide through some of the typical charges you might see to better prepare you for settlement. Also, please remember that the expenses, charges, and taxes noted here can change without notice!
In the interest of focus, we’re addressing expenses for a Virginia home sale. Washington, D.C., and Maryland home sales can incur different fees, and we will explore those at a later date.
With that, let’s get going.
For starters, if you have a loan on the home you’re selling, it’ll be one of the first things noted as paid at settlement. In addition, you’ll probably have to pay some portion of property tax as well.
In Virginia, property taxes are paid in arrears, so the tax due date covers most recent tax period leading up to that due date. They’re paid twice a year—July 28 and Dec. 5 (or the following business day if due dates fall on a holiday or weekend). So, if you settle on your home sale on May 15, you would be responsible for property taxes from Jan. 1 through May 15 of that year at settlement.
Now, if you thought those were the only taxes you would have to pay, think again.
In Virginia, sellers must pay a grantor tax on their home sale. The tax is $1 per $1,000 of sale price. So, for an $800,000 home sale price, the grantor tax is $800. Of course, since our Virginia sellers are lucky enough to be in Northern Virginia, home sellers also get to pay a WMATA Regional Transportation Improvement fee totaling $1.50 for every $1,000 of sale price. And if that wasn’t enough, an additional Regional Congestion Relief Fee is assessed at $.50 per $1,000 of sale price.
Of the required charges on the sale of a home, these fees typically are the most surprising for our sellers.
Other charges, which may vary a bit, include title company expenses. A title company will most likely handle the sale of the property. This is the entity that ensures all paperwork is correct to transfer the property from seller to buyer, files the new deed, completes title searches to ensure there aren’t any questionable items in the property’s sale history, ensures paperwork and money goes where it’s supposed to go, and so-forth.
Typically, the settlement charges to sellers are a little less than those to buyers. Ultimately it depends on actions the title company may have to take to get the property to settlement—if they have to correct discrepancies, release liens on the property, or any other number of tasks—the charges can increase. But for the sake of argument, a recent sale included charges to the seller of about $1,000. This was a rather typical sale with no real surprises or extra effort required by the title company.
Fortunately, however, there’s one area where sellers can really choose to keep more money in their pocket after the transaction, and that’s on the sales commission. Oftentimes, the number of 6 percent is bandied about in conversation, but keep in mind, there is not a set commission rate. For example, we at D.C. Region Real Estate with Samson Properties charge 4½ percent commission, and sellers receive full service. This includes professional photos, home evaluation, listing on the multiple listing service, brochures, expert price analysis, sign installation (where permitted), an exclusive web site for the property, and much more.
So if you’re planning to dive into this active sellers’ market, please give us a call. We’ll analyze your property and provide recommendations with no strings attached, and you’ll always get one-on-one personal service that ensures you will get the most out of your home sale and ultimately end up with more in your pocket at settlement.
Christopher Prawdzik and his wife Angela Logomasini are licensed Realtors® with Samson Properties in Alexandria and are members of the Northern Virginia Association of Realtors® Top Producer’s Club. Operating as D.C. Region Real Estate, they offer comprehensive real estate services, including 4½% full-service listings, throughout the entire Washington, D.C. real estate market. Angela is licensed in Virginia, Washington, D.C., and Maryland. Christopher is licensed in Virginia and Washington, D.C. In addition, Christopher holds a broker license in North Carolina and is affiliated with McGary & Associates.
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