Introduction
Did you know that when selling your house in Lone Star State, you can expect to pay around 6-10% in closing costs? So, while you could stand to make a nice profit on your home, it’s crucial to understand that selling a home isn’t without its costs.
You need to be aware of the various expenses accompanying a home sale. In this article, we’ll set out the cost of selling a house in Texas and explore affordable alternatives.
Understanding the Costs
If you’re planning to sell a home in Texas, it’s important to know what actual costs you’ll need to cover to close the deal. Besides paying off your mortgage, you’ll also have various selling costs.
These can include commissions to a real estate agent, filing fees, notary fees, and potential taxes. Additionally, you may need to invest in preparing your home for showings or hiring a lawyer.
Understanding these costs is crucial for sellers because they can significantly impact your overall profit from the Texas home sale. As a result, you may find yourself with less money than expected to put toward your next home.
Real Estate Agent Commissions
![a person signing a contract](https://cdn.carrot.com/uploads/sites/55961/2024/07/sale-3701777_1280-1024x542.jpg)
Many first-time Texas home sellers are surprised to learn that they’re supposed to cover the commissions for both their agent and the buyer’s agent.
The average real estate commission in Texas is between 5% and 6%. These commissions are typically calculated as a percentage of the home’s final sale price and then split between the seller’s and buyer’s agents.
While this might seem a hefty expense, there are ways to reduce commission costs. Some sellers opt for discount brokers or flat-fee services. Both can offer lower rates compared to traditional agents. By exploring these options, you can potentially save a significant amount of money, making the selling process more affordable and increasing your overall profit.
Closing Costs
When selling your Texas home, be ready to pay closing costs, which can often be higher than anticipated. Sellers should budget around 6–10% of the home’s sale price (including agent commissions).
For example, if the median sale price of a home in Texas was $356,900 in May 2024, you’ll need to set aside about $21,414 for closing costs.
Here’s a breakdown of the typical closing costs for Texas home sellers:
Title and Escrow Costs
Title insurance is crucial as it protects against any potential title issues. The cost of this insurance depends on the home’s price. Typically, this fee is 1-2% and is split between the seller and buyer. If you negotiate the offer well, you could end up saving on these closing costs.
Legal Fees
Unlike some states, Texas doesn’t require real estate attorneys for closing. Instead, real estate transactions are usually completed through a title company. However, it’s still wise to consider hiring a real estate attorney to ensure everything is in order.
If you do involve an attorney, expect to pay them at least 6% in commissions and an additional document preparation fee if you choose that option.
Transfer Taxes
One advantage for Texas sellers is that there are no transfer taxes for real estate sales, sparing you from these seller closing costs.
Tips for Negotiating Lower Closing Costs
There are several strategies to consider in negotiating lower closing costs:
- Get quotes from multiple title companies and escrow agents to find competitive rates.
- Some real estate agents may be willing to negotiate their commission rates, especially in a competitive market.
- While not required, having an attorney can ensure everything is handled correctly, potentially saving you from costly mistakes.
- Ask your agent or title company if there are any discounts available, such as bundled services.
Pre-Sale Preparations
![man painting a house](https://cdn.carrot.com/uploads/sites/55961/2024/07/painter-2247395_1280-1024x768.jpg)
When preparing for a home sale, several costs should be considered that go beyond the typical closing expenses.
These additional costs can make a significant difference in how quickly your home sells and the final sale price you receive. Here’s a closer look at all the costs associated with getting your Texas house ready for the market.
Home Repairs and Improvements
Before listing your Texas home, you may need to invest in minor repairs and improvements. This could include repainting walls, fixing leaky faucets, or addressing other maintenance issues.
If a home inspector identifies more significant problems, you may have to pay for those repairs or negotiate with the buyer to cover the costs.
Staging
Staging involves decluttering, rearranging existing furniture, or renting new furniture to create a more inviting atmosphere.
Professional staging can make your home look more spacious and attractive, helping buyers envision themselves living there.
While this can be an added expense, many Texas home sellers find it pays off by reducing the time their home stays on the market, often leading to higher offers.
Professional Photography
High-quality photos are essential in today’s real estate market. Most buyers start their home search online, and professional images can make your listing stand out.
Investing in professional photography ensures your home is showcased in the best possible light, highlighting its strengths and increasing its appeal to potential buyers.
Budget-Friendly Ways to Prepare a Texas Home for Sale
Preparing your home for sale doesn’t have to break the bank. Here are some cost-effective strategies:
- Hire professionals to do a deep cleaning to get your home spotless.
- Tackle minor repairs yourself to save more money. Fix leaky faucets, replace burnt-out light bulbs, and patch up minor wall damage without professional help.
- Improve your home’s curb appeal by mowing the lawn, trimming hedges, and planting some colorful flowers.
- Remove personal items and excess furniture to make your home look more spacious and inviting.
- Apply a fresh coat of neutral paint to make your home look cleaner and more modern, appealing to a broader range of buyers.
Marketing and Advertising
Along with sprucing up your home, you need to invest money in the marketing process. You can either have the agent handle it or hire a marketing expert.
Be active on social media and ask friends and family to spread the word. Proactive marketing and advertising will help you find offers quickly and at the best price.
Seller Concessions
Seller concessions are incentives a home seller offers to make their property more attractive to buyers. They are often provided in competitive markets or when a property has been on the market for a while.
Incentives include covering the buyer’s closing costs, paying for repairs or upgrades, and offering to buy down the buyer’s mortgage interest rate. To minimize or avoid offering concessions, sellers can focus on pricing their home competitively, ensuring the property is in excellent condition, and highlighting its unique features and benefits in listings.
Moving Costs
When selling a house in Texas, moving costs can quickly add up, so it’s essential to understand and plan for these expenses. Hiring a moving company is typically the most significant cost.
Prices can vary between a few hundred dollars to several thousand, depending on the distance and size of your move.
To keep moving costs down, start by decluttering. Donate or sell items you don’t need. Get quotes from several moving companies and consider moving during off-peak times for better rates. Packing yourself instead of using a packing service can also save money.
Taxes and Miscellaneous Fees
There are several taxes and miscellaneous fees to consider. In Texas, property taxes are typically paid annually. When you sell a house, you’ll need to pay your share of the taxes up to the closing date. These prorated taxes only need to be paid based on the portion of the year you owned the home.
Other miscellaneous fees to be aware of include HOA transfer fees, which cover updating the association’s records to reflect the new owner. If your home is in a community with a homeowners association (HOA), you might be charged HOA transfer fees.
On the brighter side, sellers in Texas may be able to claim potential tax deductions. You can deduct costs associated with selling your home, such as real estate agent commissions, legal fees, and home improvements made to increase the sale price.
Comparing Costs in Major Texas Cities
![Texas flag](https://cdn.carrot.com/uploads/sites/55961/2024/07/pete-alexopoulos-JFfDRKlI3hY-unsplash-1-1024x577.jpg)
Due to several factors, closing costs can vary significantly when you sell a house in major Texas cities like Austin, Dallas, Houston, and San Antonio. Since most of the closing costs are a percentage of the final price of the property, they vary based on each city’s median listing price.
Austin
Known for its booming tech industry and vibrant cultural scene, Austin generally has marginally higher real estate prices than the rest, with a median home price of $536.8K in June 2024. The cost of hiring a moving company here is higher, and so are property taxes. Due to the property prices, miscellaneous fees like HOA transfer fees and title insurance can also be on the higher side.
Dallas
Dallas, with its strong economy and diverse job market, also has substantial real estate costs, with the median home price at $387.1K in June 2024. Its lower median price means it’s cheaper to sell a house here than in Austin. Moving costs and property taxes are still considerable but more manageable. HOA and other transfer fees are comparable to those in Austin, but slightly lower home prices can ease some of these expenses.
Houston
Houston offers a more affordable cost of living than Austin and Dallas, with a median home list price of $340K in June 2024. Its housing market is diverse, and while property taxes can be high, other costs like moving services and miscellaneous fees tend to be lower. No state income tax in the Lone Star state helps keep overall selling costs reasonable.
San Antonio
San Antonio typically has the lowest costs among these major cities, with its June 2024 median home price being $300K. With its affordable housing market, moving expenses and property taxes are generally lower. HOA fees and other miscellaneous costs are also more affordable, making it one of the more budget-friendly options for selling a home in Texas.
What is the Cheapest Way to Sell my House in Texas?
![house and keys](https://cdn.carrot.com/uploads/sites/55961/2024/07/house-keys-4521073_1280-1024x769.jpg)
Are you looking forward to a successful home sale but worried about all the closing costs? Luckily, there are some cheaper alternatives than a typical real estate transaction;
Selling to a Cash Home Buyer
Selling to a cash home buyer can be one of the quickest and most hassle-free ways to sell a house. Cash buyers can often close in days, which is ideal if you need to sell quickly due to a job relocation or financial difficulties.
This method also helps you avoid many fees associated with traditional sales, such as real estate agent commissions, staging costs, and extended maintenance expenses. To find reputable cash home buyers in Texas, research online reviews, ask for recommendations from friends or family, and check with the Better Business Bureau.
For Sale by Owner (FSBO)
The For Sale by Owner (FSBO) approach gives you direct control and savings on agent fees.
However, FSBO comes with its own set of challenges, including handling all the marketing, negotiations, and paperwork yourself. You’ll need to invest time and effort to ensure your home is priced correctly, well-marketed, and ready for showings.
Using Discount Real Estate Services
Discount real estate services, such as discount brokers and flat-fee MLS services, offer a middle ground between FSBO and traditional real estate sales. Discount brokers provide a reduced commission rate while still offering essential services like listing, marketing, and negotiations.
Also, flat-fee MLS services allow you to pay a one-time fee to list your home on the Multiple Listing Service (MLS), making your property visible to a broader audience of potential buyers. These services reduce selling costs by eliminating the high commission fees of traditional agents.
Conclusion
Selling a house in Texas comes with several costs. Expenses like realtor commissions and closing costs all add up to affect your bottom line. To save money, you can sell to a cash buyer for a quick and fee-free sale. Try FSBO to avoid agent commissions, or use discount real estate services to lower listing costs. By planning ahead and exploring these options, you can manage expenses, making the process of selling your house more affordable.If you’re wondering who can sell your house fast in Texas, A-List Properties can help! Our compassion and “serve-first” attitude set us apart from the rest. Contact us today.
![Sell My House Fast Texas | We Buy Houses Texas](https://cdn.carrot.com/uploads/sites/55961/2021/08/Picture-of-Zach.jpeg)
Zach Shelley
Zach Shelley is a seasoned real estate investor with a diverse network spanning across the nation. As the founder of his own real estate venture, Zach is committed to offering innovative solutions to homeowners facing various real estate challenges.. Through his dedication and strategic approach, Zach continues to make a significant impact in the real estate industry, providing homeowners with alternative pathways to navigate their property transactions.