Beyond closing costs, basic home-prep projects like painting and staging can cost home sellers thousands of dollars
Home sellers in the United States spend $20,851 on average to sell their homes, according to Zillow® and Thumbtack’s 2019 Hidden Costs of Selling analysis. This includes closing costs, but also the improvements and other projects made when people are preparing their homes for sale.
More than half of today’s sellers are doing so for the first timei, and the costs associated with the process may come as an unwelcome surprise. Zillow and Thumbtack identified several common – but often overlooked – expenses to inform sellers as they prepare to list their homes this spring.
The majority (79 percent) of sellers complete at least one home improvement project before putting the home on the market, which tends to pay off. Sellers who make improvements to their homes are more likely to sell for more than their asking price than those who don’t – 22 percent versus 16 percent, according to the Zillow Group Consumer Housing Trends Report.
Sellers who hire professional help for common home prep projects tend to spend, based on a national average, $6,570 on improvements like interior and exterior painting, staging, and carpet cleaning, as well as local moving costs to their new home. But with the cost of labor varying by market, sellers in different areas could see significantly different costs. Sellers in Sacramento can spend about $7,800 preparing their home for sale, compared with Phoenix sellers, who could spend about $4,000 for the same projects.
Closing costs are another big expense for home sellers, including agent commissions and transfer or sales taxes. Nationally, these can add up to $14,281, on average, but because they are based on the home’s sale price, sellers in the nation’s priciest markets pay much more. In the San Jose metro, sellers pay $76,015 on average in closing costs, the highest of metros analyzed. By comparison, sellers in Cleveland spend the least – $9,046.
Preparing a home for sale is just one of the things that can be stressful for sellers. The two biggest challenges for sellers were timing the sale with the purchase of a new home, and selling it within the desired time frameii. And with some of the hottest markets cooling off, buyers are able to be more selective as they look for a new home, meaning sellers may have to do more to get their homes sale ready. For homeowners preparing their home for sale, Thumbtack is the website and app that helps them find local, skilled pros to complete any project. For people looking for an alternative selling option to avoid the stresses of selling, Zillow Offers lets homeowners skip the prep process and choose their own closing date.
“Selling is often a complicated process that can sometimes require extensive prep work in order to put your best foot forward for a successful sale,” said Skylar Olsen, Zillow’s director of economic research. “It also comes with huge transaction costs that aren’t necessarily top of mind to someone who hasn’t sold a home in a while or never has had the pleasure. Selling was hard even in the sellers’ market of recent years, and it’s going to get harder as markets soften.”
“While the costs of these touch-up projects can add up, particularly in high cost of living metros, sellers should remember that by taking care of these projects, they can get a really strong return on their investment and may be more likely to sell their home for the highest possible price,” said Lucas Puente, Thumbtack economist. “As a first step, homeowners considering selling their home in the next 12 months should start doing research and budgeting appropriately to give themselves ample prep time.”
Basic Home Prep
New York, NY
Los Angeles-Long Beach-Anaheim, CA
Dallas-Fort Worth, TX
Miami-Fort Lauderdale, FL
San Francisco, CA
Minneapolis-St Paul, MN
San Diego, CA
St. Louis, MO
San Antonio, TX
Kansas City, MO
Las Vegas, NV
San Jose, CA
Zillow and Thumbtack’s 2019 Hidden Costs of Selling report factored in closing costs (transfer taxes and agent commissions) and several basic home prep costs. Zillow computed transfer taxes by using the tax rate for the primary state within each metro area (in cases where metro areas cross one or more state lines), which were then applied to the median home value for that area. Zillow also assumed 6 percent for real estate agent commissions and applied it to the median home value for each metro area. For home prep costs, Thumbtack looked at tens of thousands of quotes from small business professionals around the country and determined the average cost for each expense within the selected metros. For the purposes of this analysis, carpet cleaning, interior and exterior painting, full-service lawn care, home staging, house cleaning and local moving costs were identified as seven of the most popular seller prep projects completed by Thumbtack during the selling a home sale process.
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists, data analysts, applied scientists and engineers produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.
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Thumbtack, headquartered in San Francisco, was created to solve a seemingly simple problem: local professionals need customers so they can run and grow their business. Customers need local pros too, but have trouble finding the right ones. So in 2008, the Thumbtack founders developed a marketplace bringing the two together. Since then, Thumbtack has helped hundreds of thousands of skilled professionals build successful businesses and millions of customers each year with everything from plumbing, to catering, to personal training to math tutoring. Learn more at www.thumbtack.com.
For further information: Lauren Braun, Zillow, firstname.lastname@example.org, Kendal Pektas, Thumbtack, email@example.com