How much you can make selling your house will depend on home size, condition, the amount of land, the local market and any expenses related to your house like a mortgage or home equity loan.
If you go the traditional route and sell through a real estate agent, you can expect to pay between 4-6% of the sales price of the house in real estate commissions. On top of that, you will have to pay for repairs and any other work necessary to get your house ready to list. That will significantly impact your profits, and so will a lot of other outside factors.
Factors that can impact how much you make selling your house include:
- Age and Condition – Cracked foundation, leaky roof, pest infestations or wear due to age
- Appliances that need upgrading
- Systems that need upgrading- electrical, plumbing, heating, air conditioning or natural gas
- Location – Distance to shopping, entertainment, amenities, highways, and public transportation
- Quality of schools
- House size – Amount of livable space, square footage, and the number of bedrooms and bathrooms
Now that you know what factors affect the sales price of your home, let’s look at how to calculate how much you will make when selling your house.
How to Calculate You Home’s Sales Price and Profit
To calculate how much you’ll make selling your house, take the sales price of the house, subtract out all expenses and fees, and the leftover amount is how much you will make. The formula looks like this:
Sales Price – Total Expenses = Profit
But remember, total expenses change based on if you use a real estate agent or sell to a home buyer, and the factors from the bullet list above.
For example, let’s say the sales price of your home is $200,000. Taking into account real estate commissions, other fees and taxes and an outstanding mortgage balance of $75,000, this is how you would calculate how much you will make when selling your home:
- Sales price of your house: $200,000
- Realtor fees: $12,000 ($200,000 x .06) Typically 6% of the sale price
- Outstanding mortgage: $75,000
- Other fees and taxes: $3,000 (this will vary based on where you live)
Total Expenses= Realtor fees + outstanding mortgage + other fees and taxes
$12,000 + $75,000 + $3,000 = $90,000
Sales Price – Total Expenses = Profit
$200,000 – $90,000= $110,000
You would make $110,000 on the sale of your house in this example. And that leaves the question, how to estimate the sales price of your home. Start by building a list of comparable properties, or comps for short.
To do that, go to a website like Zillow or Redfin and find houses in your direct area that are similar to yours and have sold within the last six months. The houses you choose for comps should be similar to yours in size (square footage, number of bedrooms and bathrooms), age, and condition. Now adjust your price up or down based on the comparable properties.
For example, if your house has nicer updates or a little more square footage, then it could sell for more. If it needs some repairs or is on a busy road, it might sell for a little less than the comps. You will get a pretty good idea of what your house will sell for based on that information, and now you can calculate how much you will make when you sell your house.
After figuring out how much you will make selling your home, you may want to know if there is a way to increase your profit. After all, who doesn’t want more money in their pocket? Below you will learn ways to increase your home’s sell value.
Ways to Increase the Amount You Make Selling Your House
There are several things you can do to help increase the sell value of your house:
- If your home is in foreclosure, you are living in a condemned property, or you just need to sell fast, a company like ours can be a great solution. Selling on the market will require a lot of time, and it could lead to stigmas lowering your home’s sales price. Selling to a home buyer like us lets you sell for cash and without the hassles.
- Update your kitchen. This doesn’t have to mean a huge remodel. Look to upgrade your appliances when they are on sale. Labor Day, Black Friday, and Presidents’ Day are great times for this. Swap out the hardware on your cabinets, add a backsplash and paint the walls. You can even do most of this yourself, and it won’t cost you a ton of money.
- Add insulation if there isn’t any. Insulation may not be glamorous, but it can make a huge difference in lowering your energy costs. The EPA estimates adding insulation can save you up to 15 percent a year on your heating and cooling bills, and buyers are willing to pay more for energy-efficient homes.
- Does your home have central air conditioning? If not, adding it could increase the sales price of your home by up to 10%. If having central a/c is common in your area and you don’t have it in your home, it could turn a lot of buyers off. Adding or upgrading your system could potentially increase your home price and help you sell faster.
- Paint! Painting is a way to give your house a facelift, and it doesn’t cost a lot of money. You don’t have to paint the whole house either. Focus on the rooms that get a lot of traffic, like kitchens and bathrooms. Choose a neutral, lighter color. It will help to brighten your home!
- Look at your curb appeal. Take a little time and make sure your yard looks great. No need for any drastic changes. Trim bushes, add some mulch, and keep it low maintenance for the next owner.
A lot of small changes and updates can have a huge impact on how much you make selling your house and how quickly you sell it. If this list sounds like a huge hassle, don’t worry! Tackle one project at a time, and before you know it, you will be ready to put that for sale sign in your yard.