According to a new study by Zillow and Thumbtack.com, U.S. homeowners are spending an average of nearly $20,000 to sell their homes in 2018. The exact total is $18,342, according to Zillow and Thumbtack’s 2018 Hidden Costs of Selling analysis, which breaks down several common expenses associated with selling a home that some homeowners don’t necessarily think of when they decide to sell.
The 2017 Zillow Group Consumer Housing Trends Report indicated that sellers spend an average of five months considering seller their home before finally listing it. That’s a lot of time to consider all the angles, but there are many costs that slip below the radar for many of these sellers, especially since 61 percent of today’s sellers have never sold a home before.
"Even in the hottest housing markets in the country, selling a home takes time and costs money," says Jeremy Wacksman, Zillow's CMO. "From decluttering and staging to pre-inspections, agents and homeowners often spend months behind the scenes prepping a home—well before it's listed on the market."
Zillow and Thumbtack found that 78 percent of sellers make at least one improvement to their home before listing it. For sellers who hire professional help for these improvements, the average expense on projects such as “painting, staging, carpet cleaning, lawn care and gardening, and local moving costs” comes to around $4,985. However, those costs can vary wildly depending on the state of the local market. In San Jose, California, that total for comparable projects would average $6,580, whereas sellers in Dallas, Texas, could expect to pay an average of $3,720.
Commissions for real estate agents and taxes are where things really start to add up, with sellers spend an average of $13,357 nationally on those fees. Naturally, the market drives those prices up or down accordingly. Back in the aforementioned San Jose, that average soars to $74,927 for a median-priced house. In Indianapolis, which features lower home values and no state transfer tax, the average is only $8,604.
"While there could be some initial sticker shock associated with the costs of selling a home, investing in home improvement projects like painting and home staging often proves to be very valuable in the long-run," said Lucas Puente, an economist for Thumbtack. "Homeowners starting to think about selling should take time to research and budget for the projects that can ultimately help sell their home faster and at a higher value."
According to a recent report by Redfin, while national median home prices rose almost 9 percent (to $285,000) in February, the number of homes for sale dropped more than 11 percent from January and were flat compared to a year ago. It was the twenty-ninth consecutive month inventory suffered, while prices keep going up. Only six of 73 metros saw sales grow by double digits from last year, the report said. Louisville led the nation in year-over-year sales growth, up 25 percent, followed by Greenville, South Carolina, which was up 18 percent.