Realtor.com
In the competitive housing market, selling a starter home and buying the next one can be financially challenging due to various selling costs. Understanding the expenses involved in selling a home and planning for upfront buying costs are essential for a successful transition.
Key Takeaways
- Selling a home incurs significant costs including real estate commissions (5-6% of sale price), closing costs (3-6% of sale price), and preparation expenses ($1,000 to $3,000).
- Buyer concessions, which can range from covering closing costs to repairs, typically cost $2,000 to $5,000 or more.
- Upfront buying costs for a new home may include a down payment (3-5% minimum), closing costs (2-5% of purchase price), and additional expenses like home inspections and moving costs.
- To ensure a smooth transition, keep liquid funds accessible for a down payment, consider short-term financing options like bridge loans or HELOCs, and be prepared with alternative housing arrangements if the purchase and sale timing doesn’t align.
- Negotiating a smaller earnest money deposit upfront can help preserve cash for the next purchase, and having a realistic interim housing plan reduces stress and rushed decisions in a competitive market.
This summary has been generated with AI tools and edited by Realtor.com News & Insights editors. The full story, written and edited by Realtor.com News & Insights newsroom journalists, is linked at the top of the summary.