There are many fees that you have to take into account when you have decided it’s time to sell my house. Some are negotiable and others are fixed and therefore unavoidable. It’s true that as the seller most of the costs are incurred by you and are taken from the total sales price when you eventually sell your home. Many people wonder “How much does it cost to sell my house” so we have prepared below a summary of some of the costs you can expect to incur whether you sell your house online or with an agent.
Below are some of the costs you will incur when you sell your property.
Real Estate commission fees
The real estate commission normally always the largest fee that you will incur in any house sale. When you sell your house in Spain this can be anything from free to as high as 10%. As an example if you sell your house for €300,000 you could expect to pay on average €15,000 + IVA so in total €18,150 in real estate agent commissions alone. The commission is retained by the real estate agent who has sold your house. It may be the case that they have split this with another real estate agent so they may only be working for 2.5% but the net effect is it is you as the seller who is paying the full 5 %.
Sometimes when you may be able to negotiate a lower real estate agent commission but one thing you need to consider is will the agent put as much effort into selling your property or the property that has a higher commission in it for themselves.
There is also an option to avoid fees by choosing to sell your property yourself, as a homeowner you can try to avoid high real estate agent fees by listing your property yourself as for-sale-by-owner (FSBO). Of course, when doing this you need to be prepared to assume the duties of a real estate agent. The minimum to do this would be to prepare your home for sale, decide where to advertise, handle incoming enquiries, carry out viewings and negotiate a sale price.
There is also now a hybrid of the two options where you can choose to instruct an agent who will work on a fixed reduced fee or you can even pay in advance. This can give you a happy medium of the two previous options where the usually online real estate agents will carry out most of the normal duties that a traditional real estate agent will do except for the viewing which is normally carried out by you the homeowner. This can carry two benefits, firstly their fees are much lower, secondly, the buyer can feel more relaxed and less pressured if it is not a “Sales Person” showing them the property Mynido gives you this option.
Should I carry out cosmetic repairs before I sell my house?
If you have decided it’s time to sell your home, it’s likely there are things you could do to enhance the curb appeal of your property and even possibly raise its value in doing so. Now is the best time to carry out those small repairs that you have been putting off for the last few years and a few thousand euro’s invested now could make the difference between selling or not or even mean you get the asking price for your property instead of a low offer. Remember the interested viewers will likely be viewing a number of properties so first impressions count
These repairs can vary from a quick coat of paint on a garden fence to replacing or repairing damaged gutters. This is not only important for a viewing but also to make your property attractive enough to generate that enquiry to start with.
Carrying out repairs like this is not wasted money as let’s face it, they need doing anyway so even if you don’t sell your house at least the maintenance is up to date and making minor repairs is much better than waiting for them to turn into major repairs.
Any major repairs can obviously set you back financially so be prepared for them. You need to either price your house accordingly and take these into account or be prepared for the cost of them to be negotiated from the sale price.
When viewing buyers will like to envision what your house could look like when they move in. If you’re a seller, it’s worth the investment of paying for cosmetic repairs, like fresh, neutral paint and new flooring. Improve your properties curb appeal with by ensuring the outside looks fresh, ensure plants or flowers are all appropriately trimmed, clean paths, make sure all lights work and bulbs are bright. If the buyer thinks your home is loved by the appearance they will also assume it is well maintained.
Many other sellers will stage their home to look presentable and you need to ensure its not your property that is remembered for the wrong reasons.
If your house is vacant it can be better to have furniture in the property. This can be hired rather than purchased or alternatively as Spain has a large number of ex-pats buying a furnished house can be a big attraction. This could be the difference between someone buying your property or another furnished property.
A question that you may be asked by any interested buyers may be how much your utility bills are. If possible before any viewings create a summary of your annual bills. The more informed the buyers are the more chance you have that they will like your property.
When you sell your property it is likely depending on where you are moving to that you will have final bills to settle. Remember this will be taken into account by your lawyer and always remember to notify the utility provider so you don’t incur necessary costs.
Always take meter readings and I have always taken pictures of the meters using my mobile telephone so I have them to hand when I am in my new property.
When your home is sold the outstanding balance of the mortgage will be deducted from the sale price (if applicable). This may have settlement fees depending on your lender. Your lawyer should be able to advise you of these before your completion date.
You’ll likely have to add prorated interest you’ve accrued to the total balance. Some mortgages also have an early settlement fee that you might have to pay. These should all be on your original mortgage agreement and your lawyer should be able to assist you with this. It’s always worth knowing exactly what will be deducted from the sale price before the day you exchange contracts.
There are many other fees that could be due if you are selling your property such as community fees, property taxes, legal fees, transfer taxes and title insurance. You also may be asked to pay an escrow fee, a brokerage fee and a courier fee. Altogether, closing costs can range from 2 to 4 percent of the home’s sales price.
Capital gains tax
There are many variables in this but in short, if you are a non-resident the Spanish tax authority withholds 3% from the sale of your property which is taken directly from the sale price of the property. This is a safeguard so that non-residents do not disappear before their CGT account is settled. This settled once you have completed form 210H
There are lots of exemptions and you should ensure your lawyer informs you of the amount if any that will be withheld to cover any CGT.
Because Spain operates with Autonomous regions the property tax can vary from region to region and it even depends if the property is a new build or a resale property. This can vary from around 7% up to around 12%. Another influencing factor depending on the region is the purchase price of the property. Most of the regions also use the cadastral value for this calculation and not the sale price. This is to stop cash payments from buyers to sellers to reduce their tax liabilities.
It is important to remember when selling or indeed buying your property that you will have many costs and it is, therefore, important to minimise these wherever possible. It is of course equally important to know exactly what these will be and therefore please ensure your lawyer gives you full details on what you will be paid when the balance of the sale is transferred to you.