Beyond Commissions and Closing Costs: The Provident Bank Outlines Hidden Expenses in Selling Your Home

Everyone knows that when you sell your home, there are closing costs, realtor commissions, legal fees, etc...but what about the hidden costs?

“The cost of selling a home goes beyond the standard fees. Sellers should be aware of them and budget accordingly before putting their house on the market,” says Barbara Carrollo-Loeffler, Senior Vice President and Residential and Consumer Lending Director of The Provident Bank, which closed on $310MM in residential loans last year.

Carrollo-Loeffler points out the following “hidden costs” that home sellers often neglect when planning and pricing their home sale:

• Appraisal – A professional appraisal will help you establish and validate the selling price of your home – especially if you list below the appraised value. Typical appraisal fees in the tri-state area can range widely, depending on the value, size and intricacy of the home and what you plan to leave behind after you move. The cost of a professional appraisal is also determined by the number of units (1-4 family), usage (primary/second or investment) and type of house or condominium.

• Repairs – Is your infrastructure sound and updated? Buyers will want to know that the home will be generally headache-free in the first year. Some elements, such as plumbing and septic systems, are required by law to be up- to-date and free of major defects as well as meeting local municipal code and zoning requirements. Did you get the proper permits for improvements and/or additions made to your home? It would be beneficial to have your own inspection performed, prior to putting the house on the market, so the sale is not harmed by a poor inspection.

• Staging – Buyers want to see a clean, clutter-free home, so be sure the walls (inside and out) have a fresh coat of paint and all rooms are visually compelling. In some cases, you might even want to buy a piece of furniture or two to accent a room that had been unused or outdated. Improve curb appeal by changing the setting often, especially if your home is on the market for more than one season.

• Storage – Related to staging, you’ll need to de-personalize your home to some extent, which means getting rid of some large family photos, office files or cabinets and religious, hobby or sports memorabilia, etc. Since all that clutter has to go somewhere (other than your basement or garage, which also needs to be clutter-free), you might want to rent a small storage unit for the duration of your sale effort.

• Negative Equity – If you are still paying into a mortgage and your home is selling for less than what you owe, you’ll need to pay off the remainder upon closing.

• Holding Costs – While your house is up for sale, you need to continue paying taxes, insurance, mortgage and other maintenance payments while you wait for a sale or closing. This needs to be accounted for, especially if you move into a new place and need to pay for both simultaneously.

• Incentives – It’s still a buyer’s market and a discerning buyer might ask for added value. For example, throwing in that big-screen TV that fits perfectly on the wall or the matching set of stainless steel appliances that add just the right touch in the kitchen might just help you tip the buyer toward a sale. But if you do that, consider the cost of replacing them in your new home.

On a final note, Carrollo-Loeffler reminds sellers that a low, but fair, starting price is the best chance for a competitive advantage in a buyer’s market, so you might consider undercutting the competition by at least 10 percent.

“You can always anticipate that the price may go up if there is more than one interested buyer. But if you price too high, there might not be any offers or traffic at all,” notes Carrollo-Loeffler. “And if there aren’t any buyers, the hidden costs will continue to increase until the house is sold.”

About The Provident Bank

The Provident Bank (www.providentnj.com) is an FDIC Insured, Equal Housing Lender community-oriented bank offering “Commitment you can count on” since 1839. Provident Bank is a wholly owned subsidiary of Provident Financial Services, Inc. (NYSE:PFS), which reported assets of $8.5 billion as of March 31, 2015. With $5.8 billion in deposits, The Provident Bank provides a comprehensive suite of financial products and services through its network of branches throughout northern and central New Jersey and eastern Pennsylvania. The Bank also provides fiduciary and wealth management services through its wholly owned subsidiary, Beacon Trust Company.