It’s common knowledge that selling a house doesn’t just make you money, but costs some, too. To start, you’ll have to invest in repairs, home staging, an appraisal, and the like. However, you should be aware of other other home selling costs in Texas that will snatch up your earnings when you’re least expecting it. Below, we’ve listed four common but sneaky charges to anticipate when selling your house in Texas.
1. Transfer Tax
Most cities will charge you for the changing of owners in what is known as a real estate transfer tax. Essentially, the government requires a fee to switch the property title and documents from your hands to the buyer’s. The actual amount you’ll have to pay is based on a sliding scale depending on your location, but will always be a percentage of the total sale price, rather than a fixed number.
Ultimately, the state doesn’t care if this is paid by the buyer or the seller, but it usually defaults back to the seller if an agreement between the two is not reached. Tricky home selling costs in Texas like this are best decided with the presence of a real estate agent, lawyer, or both. It’s important to note that this fee must be paid at the time of closing and is not deductible in your income tax return.
2. Capital Gains Tax
This is a home selling cost you may not be familiar with, but certainly won’t miss once it pops up on your tax returns. You’ll be charged a capital gains tax if you earn more money selling your property than what you originally spent buying it. It’s not all bad news, as you can write off up to $250,000 of profits as a single person, or double that as a joint couple. However, this tax break can only be used if you lived in the house for two of the past five years.
Liens are a legal right or claim against a property. Basically, creditors are given a stake in your property in exchange for money owed to them. Liens are not inherently a bad thing; in fact, your mortgage is one type of lien that can be fully paid off with the sale of your house. Others include:
- General judgement liens due to failed debts
- Tax liens from to unpaid taxes
- Mechanic’s liens for outstanding payments to contractors
While your mortgage is a lien that won’t inhibit your sale, be aware of others that will freeze the selling process until they are fully paid off.
4. Real Estate Agent Commission
Real estate agents are free of charge, but only initially. They’ll eventually ask for a large chunk of your sales profits- often up to 6%- in return for their services. However, you should know that agent commission fees can sometimes be negotiated down, saving you a few thousand. While you’ll never be expected to pay upfront, it’s vital to budget out the payment before you’re left shorthanded when closing day rolls around.
Home selling costs are a hassle, but they don’t have to be. If you call United Home Offer, you can get a fast cash offer on your house, regardless of its condition, and skip the stress and expenses of listing it for sale.