A new study of 35 major metro areas from Zillow and Thumbtack estimates the average American home seller will spend nearly $21,000 on home improvements, closing costs and staging this year.
“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,” Skylar Olsen, Zillow’s director of economic research, said in a statement. “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.”
More than half of today’s sellers are doing so for the first time, the study estimated.
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 Zillow.
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.
Zillow did not survey any New Hampshire cities but found that Boston-area homeowners will pay an average of $30,085 in commissions and real estate transfer taxes and $5,495 in basic home prep.
