How Much Does it Cost to Sell a House in VA?

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In this article I'll be navigating some of the numerous elements involved in determining the cost soon before listing & around the time of closing on a home sale, focusing on net but diving deep into the out-of-pocket or out-of-proceeds factors as well. The answer to this question depends on a number of factors. While most of the below is the same regardless of state, I'll be providing some SE VA-specific examples.

1. Lowest Direct Costs (i.e. not Offering a Buyer's Agent Commission) &/or Lowest Direct Time Often Means Lowest Net Profits

Examples:

• Selling to a Cash Buyer or Wholesaler Off Market

  • They'll often advertise by talking about how you can "avoid real estate agent fees", they'll often talk about how quickly and "hassle-free" you can get your funds, they may state that they'll offer you a "full price" or "fair" offer, and sometimes they'll "pay all your closing costs", but a study showed that these offers were on average drastically lower than what you'd get selling on the open market, even when you factor in real estate agent fees and your own closing costs.

• Selling As Is

• Selling for sale by owner 

• Using a heavily discounted limited-service agent

• Refusing reasonable repair requests or other concessions by a buyer can cost a seller big time.

• Offering no or low commission to the buyer's agent has been demonstrated to have some significant negative consequences, especially on the likelihood of sale.

2. Some discretionary costs of sale can have a net positive impact.

Before you list:

• Choosing a great listing agent whose marketing is consistently excellent on their listings.

• Typically it's best to prepare the interior & exterior of a home to be in good shape before pictures, certain other marketing like Matterport 3-D tours, & before listing. Some of the most cost-effective elements include cleaning, painting, likely appraisal required repairs, likely requests by buyers, and obvious cosmetic defects that are readily made better cost-effectively.

• When an agent has multiple commission packages, the cheapest one often isn't the best.

After you list:

• Responding to feedback at times by repairs/improvements if appropriate

• Price reductions if needed

• Granting reasonable repair/concession requests to an offer or following a home inspection

Related:

• Financing Repairs/Renovations Prior to Sale

• Cost Guide to Repairs & Remodeling

• Where to Find Equipment for Home Improvement

• Sellers Overpricing Their Home

• Should You Rule Out an Agent Over Suggested List Price Differences?

3. Some misguided costs of sale or home improvements can have a net negative impact.

• I've seen where I walked around with someone prior to listing a house where they were convinced that certain net negative changes to the house were good ideas. When I refused to be convinced by their attempts to change my mind, it clearly upset them. Situations like that are some of the top reasons why sellers often mistakenly don't choose honest agents.

• As much as I like helping the environment, and hope to go solar myself at home one day, recently added solar panels, especially overpriced ones on roofs that aren't supposed to last as long as the panels, are some of the biggest net losses for improvements to homes in Virginia.

• Some buyers may be unreasonable in repair or other concession requests. It's one of the best reasons to keep the showings going after you're under contract with a buyer to encourage backup offers. On one occasion, I saved a seller >10% vs an under contract buyer's requests by securing a 3rd backup contract after 2 buyers requested 9%+ in concessions back to back in separate contracts after their home inspections, despite the 2nd buyer getting access to the home inspection prior to offer.

• I've seen where a DIY improvement gone wrong had a significantly negative impact on sale, where many buyers expressed negative feedback about it. That said, I've also seen some fantastic DIY work, where the only problems on work at the same house was with contractors, so it really depends.

4. Higher Values Tend to Mean Lower % Costs

• The higher the value, the lower the percentage of the cost of sale.

  • The higher the value, the lower commissions tend to be among full-service agents.

  • Some elements of a sale, such as the cost of using a particular closing company, have a fixed cost no matter the sales price.

5. Better Condition Upon Choice to Sell Means Lower % Cost to Sell

A property in prime condition vs when it was originally built, with no safety hazards present, no heavily deteriorating components, no home components beyond their expected lifetime, with limited clutter, and clean will have a lower % need to get the house ready to sell to maximize profits and will have a lower probability of buyers requesting high repairs.

Related:

• See "Lifespan of Various Home Components" in House Issues by Year

• Storage During a Real Estate Transition

6. Contract Differences

No matter the list price, there are a wide variety of offers that are possible, depending on factors like the costs above & other factors above & in sections below as well as the following contract differences:

• The offer templates used (which may or may not be the offer typical to your market).

  • In the REIN Standard Purchase Agreement that is common in Hampton Roads, the default provisions have the seller stating that they will pay for the following (examples, not fully comprehensive):

    • The seller's own closing costs

    • Up to 1% of the purchase price for the following combined:

      1. Appraisal required repairs

      2. Wood destroying insect & moisture inspection required repairs/treatment

      3. Well/septic treatment/repairs if applicable

      4. Walk-through inspection issues

• The terms of the offer, i.e.

  • Some buyers may request closing cost assistance

  • Some buyers on owner-occupied property may request an early possession agreement

  • Some buyers may request a home warranty

  • While not typical, some buyers may offer to pay some of your closing costs

  • In the REIN Standard Purchase Agreement, the costs of termite/moisture inspections & well/septic are typically chosen by the buyer rather than being chosen by default, though the seller can always counter on those points if desired.

  • The time of the month and of the year for closing impacts escrow needs for things like

• How the contract plays out, i.e.

  • Concession requests following home inspection or

    • appraisal required repairs,

    • a low appraisal when no appraisal guarantee is in place,

    • survey in the event of encroachment,

    • other inspection(s) w/ contingencies like well/septic or termite/moisture, especially if greater than any contractual cap (>1% on the REIN Standard Purchase Agreement in Hampton Roads)

  • Contract fall through, which sometimes results in the seller's receipt of the earnest money deposit, though it doesn't always. Also, contract fall through sometimes results in a substantively lower net. In addition, sometimes the seller is able to pursue a buyer for an amount greater than the EMD as long as contractually permitted. While the REIN Standard Purchase Agreement doesn't limit the buyer's liability to the EMD, I have seen a contract in Pennsylvania that does.

  • Sometimes there is a title defect of the property, and when there is, sometimes it can lead to contract fall through. If a seller doesn't have appropriate owner's title insurance, it can lead to additional costs.

Related:

• Competing Offer Spreadsheet

• Adam's Desired Offer Elements When Representing a Seller

Common SE VA Offer Templates:

• Hampton Roads Offers: The REIN Standard Purchase Agreement

• VAR Residential Contract of Purchase

• Greater Richmond CVR MLS Purchase Agreement Video

7. Commission Differences for Unrepresented Buyers & Buyers the Listing Agent Represents

You may get an unrepresented buyer, a represented buyer where the agent isn't asking for any commission, or a buyer agent who isn't asking for any commission. You could also get 3 different agents requesting 3 different commissions, especially if you don't offer a certain amount outright.

Agents vary regarding how they handle things when a buyer is unrepresented. There's additional time and liability involved by the listing agent. Some listing agents may want sellers to pay them a full buyer-side commission even if the buyer is unrepresented. Some listing agents may want to practice dual agency (1 agent attempts to represent both sides), transaction agency (1 agent acts as a middleman), or designated agency. While dual agency & transaction agency are legal in VA, they are not legal in all states. They are prohibited at Garrett Realty Partners without management approval, & can often go south with one party claiming to be not treated equally.

If I'm the listing agent & a buyer is unrepresented, there are a few options, since I don't do dual agency or transaction agency:

1. The buyer can make an offer unrepresented, where I will go through the offer with them and ask them what elements they would like to include in the offer while not giving advice on specific terms. The seller would pay me 1% on top of the commission that they were already planning on paying me.

2. Some buyers may want their own representation. In that case, the buyer may select their own agent from any firm they'd like, or they can ask me for a referral. Either way, the buyer's agent would typically seek a commission that isn't below what the listing agent was offering to other buyer's agents.

If I'm the listing agent & a buyer is represented by me, there are a few options that depend on the relationships established, the nature of how I initially connected with the buyer and the seller, and mutual agreement based on buyer and seller preferences. In both cases, typical listing agent and buyer agent commissions that had been offered before would be in play, unless a multiple offer situation, where if I was representing the buyer, I'd be requesting a 2.5% commission typically even if the commission offered to buyer's agents was higher:

1. I stick with the seller, and my dad, Greg Garrett, who's sold thousands of homes, represents the buyer.

2. I stick with the buyer, and my dad represents the seller.

8. Seller Closing Costs

Selling a home typically means incurring significant closing costs. Commissions typically take up the majority of that sort of cost at closing in the absence of repairs paid at closing but are not the only expenses involved.

Some sellers will have higher closing costs than others. For instance, the following sellers will incur higher closing costs:

1. Those with a mortgage, especially if there are multiple liens on the property such as a 1st mortgage and a HELOC with a penalty for paying it off and selling at the time that you plan to sell.

2. Those who are late on real estate taxes or HOA/condo fee dues

3. Sellers who have deferred their taxes to the city/county due to a special provision for doing so but that comes due in full upon sale.

4. Those who are behind on utility payments

5. Those who use a mobile notary that the closing company hires rather than closing in the closing company office

6. Those who use a different closing company than the buyer, since sometimes closing companies will provide discounts to those who have a buyer and seller close with the same company.

7. Those who hire a lower or higher cost closing company, since costs vary.

Contracts vary:

• In the typical REIN offer, unless explicitly mentioned in the box under paragraph 4, the buyer won't be covering any of the seller's closing costs.

• The VAR offer differs from that, where the buyer pays certain substantive seller closing costs (i.e. $800ish) unless the buyer adds a number to a line on the subject.

9. Many Other Impacts on Price

• The timing of the sale can have a significant impact on net proceeds depending on the market, i.e. in Hampton Roads

• your list price strategy

• The showing availability can have a big impact on sale proceeds, especially in cases where a tenant doesn't seem to care (or is being intentionally hostile) or when an agent has a bad showing policy. I can recall occasions where agents with plenty of positive reviews didn't answer me regarding showing availability for a much longer time period than you would think possible. When a listing agent has the right electronic lockboxes, a contractor lockbox, & Showingtime, the best showing service available, that cuts out any lag time by the agent for stating showing availability no matter the time or day, it's a big plus.

• whether you list on a Thursday

• whether or not you use an offer deadline

• whether or not you have great professional pictures & other marketing elements immediately upon listing, etc.

10. Listing Agent Commissions

Achieving the highest net profits isn't feasible with just any listing agent. It's best to get a great one. They're not as easy to find as you would think, either. I've seen some highly rated agents act in ways that weren't in the best interests of their sellers at all. Once I heard firsthand where a seller thought based on what an agent told him that the agent had personally sold the majority of the homes in the neighborhood, only for me to find out that he had never sold in the neighborhood before and that his first closing in business was less than a year prior.

Some listing agents have a single listing commission that they share with real estate sellers. I like to provide commission package options to potential seller clients based on the sales price & the marketing package that fits the seller's preferences. I also provide some a la carte add-ons available if they'd like more. While an article on the subject is in the works, ask me for more details in the meantime based on the price point of your sale that I can help you find out or ask me for the range based on the likely price point range.

See also section 1.

11. Listing Agent Hidden Fees

Some listing agents charge hidden fees that they don't disclose in advance. Likely the most common is known as an "admin fee", a "transaction coordinator fee", or another name like a "technology fee". In some cases they disclose verbally in advance, but some sellers see it for the first time when they go to review the listing paperwork, and might catch it or might not before they sign. These fees typically range from $300-$500, though if I'm not mistaken I've seen as high as around $1k.

While there are some a la carte options available, and there's the option to add dollar-for-dollar additional marketing to what I'm already doing if you'd prefer, the commission rates quoted by percent and by package is typically all that a seller pays to my firm.

12. Seller Closing Calculators

I include a rough closing calculation based on a number of factors in my competing offer scenario spreadsheet.

Here is one example of a Seller Closing Cost Calculator by MortgageCalculator.org - That said, the default transfer tax in this calculator is 3%. In Virginia, sellers typically pay much less for transfer tax on real estate. The state grantor's tax paid by the seller is .1% (.2% in Northern Virginia).

Related:

• The Importance of Choosing a Great Listing Agent

• Heavily Discounted Commission Limited Service Listing Agents: How to Find Them & Why To Skip Them

• When to Sell a Home Based on Market & You

• Homes Often Don't Count Against You for SSI, SSDI, Medicaid, Section 8 & Other Benefits

• SE VA House Seller Guide