If you’re looking to sell your Tennessee home, the process and profits can look quite different depending on where you are in the state. In Memphis, for example, Redfin data from August shows that the typical home sold for $174,900. But in Knoxville, the median price was much higher at $323,250, and in Nashville, it was higher still at $455,000.
Many selling costs are based on the home’s sale price, so they can vary widely. But regardless of where your home is located, you’re going to have to pay to get the deal done. Here’s what to know about the cost to sell a house in Tennessee.
Sellers’ closing costs
When you’re selling a home in Tennessee, the buyer is responsible for some of the fees involved in the transaction — it’s not all on you. But there are several closing costs that typically fall on your shoulders as the seller, including:
- Transfer tax: While Tennessee does charge a real estate transfer tax, as many states do, it’s usually the buyer who pays this fee.
- Title-related fees: Who pays for the title search and/or title insurance in Tennessee is usually up for negotiation. While buyers typically cover the cost of a lender’s title policy, you may wind up paying for their new policy.
- Property taxes and HOA fees: You still own the property until the title officially transfers over to the buyer, which means you’re on the hook for any accrued property taxes and homeowners association fees until closing.
- Legal fees: The state of Tennessee does not require either party to hire a real estate attorney. However, even though you can represent yourself in the deal, it doesn’t mean you should. Selling a home comes with loads of complex contract language and other paperwork, so it’s worth hiring a professional to handle things properly.
- Concessions: Many home sellers offer some concessions to the buyer, such as paying for a needed repair, to keep the deal moving along smoothly. When this happens, you’ll wind up covering a portion of the buyer’s closing costs.
Real estate agent commissions
The priciest piece of selling your home will likely be the commission you pay to your real estate agent. Realtors usually earn somewhere between 2.5 and 3 percent of the home’s sale price — on a $174,900 Memphis home, 2.5 percent would come to $4,372, but on a $455,000 Nashville home, it would be $11,375.
Historically, sellers have also paid for the buyer’s agent’s fee, which means your commission tab would double. However, due to changes stemming from a recent lawsuit, buyers may be responsible for paying their own agent directly. Be sure your contract spells out very clearly which party pays for which commission.
Home prep and moving costs
If you want to get the best possible price for your house, you’ll need to make sure it looks its best. Fixing cosmetic issues that might be noticed by a prospective buyer, like a cracked kitchen tile or broken light fixture, is usually a smart move, as is boosting your curb appeal with small touches like flowers or fresh paint on the front door. You may also benefit from hiring a professional home-staging service to help make the interior as appealing as possible. The cost of staging varies based on how much work is needed.
As you prepare to sell, don’t forget to factor in the cost of moving. The price tag to get all your belongings to your new home can vary based on a number of factors, and a long-distance or cross-country move will cost you much more than a local one.
How much do I get from selling my house?
How much you’ll earn on your sale depends on how much you will need to pay to get across the finish line, including closing costs, commissions and paying off your existing mortgage (if applicable). To estimate your net proceeds, subtract all of your sale expenses from the home’s final sale price. If your home has appreciated a lot in value and you make a significant profit, you may owe capital gains taxes on your earnings.
Reducing costs
If you want to rein in those expenses, there are a few ways to keep costs in check.
- Negotiate the commission fee: In many cases, real estate agents’ fees are negotiable. Some will be willing to accept a smaller slice, especially on a more expensive home, which will save you money.
- Sell as-is: Don’t want to pay for repairs or entertain concession requests? You don’t have to if you list the home as-is, essentially telling the buyer that what they see is what they get. You won’t have to shell out for upgrades — but you also may not get as high of a price.
- Shop around for services: When hiring a pro to make repairs, stage the house, repaint or do landscaping, compare costs from a few options to find the best price.
Alternatives
If you have concerns about a traditional sale, these options might be more appealing:
- Cash-homebuying companies: Companies that advertise “we buy houses!” let you bypass the need to pay a real estate agent. The upside: They move remarkably quickly and pay in cash. The downside: You’ll likely earn a lot less than you would by listing on the open market.
- Selling it yourself: You can avoid a listing agent’s commission fee by opting to sell your Tennessee house without a Realtor. While you’ll save some money, keep in mind that you’ll need to invest a lot of time and effort into the getting your property listed and sold.
- Renting it out: If you have somewhere else to live, consider finding a tenant instead of selling. Being a landlord can be a lucrative route, especially if you live in an area with high rental demand. In Nashville, the median rent for a house is $2,500 per month, according to Zillow Rental Manager.
Next steps
The Tennessee housing market mirrors the rest of the country: It’s complicated and constantly changing. With that in mind, it’s smart to have an experienced local agent by your side. Agents know their local markets inside-out and can help you find the right buyer at the best possible price.
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