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Selling your San Francisco home? These three hidden costs may surprise you...

September 19 2018
September 19 2018

Over the past few years, owners of San Francisco residential real estate have been selling their homes and fetching record prices. These jumping property values have been the inspiration for countless news articles in the last few years, and might have you wondering what your property is worth. Understanding the value of your home will help you make a well-informed decision about selling what is likely the biggest investment of your life.

The high sale prices in San Francisco do come with some expenses that might be totally unexpected, and a few can be pretty steep. Being well informed about the standard seller’s expenses in the city will help you sell your home with few surprises. Aside from the usual fees - broker fees, inspection costs, etc. - you’ll want to be prepared for these three major expenses when selling your home in San Francisco.


Energy and Water Compliance Certificate -  (Customarily Paid by Seller)

To sell residential real estate in San Francisco, you must record an Energy and Water Conservation Compliance Certificate prior to transferring ownership of the property. Part of obtaining this certificate means that an inspector will need to come into the property to look at a variety of things. They will be checking for (amongst other things): insulation wrapping around HVAC ducts, leaky fixtures or hot water heaters, installation of low-flow regulators on shower heads and toilets. Anything missing or non-functioning, leaking, or otherwise not up to par will need to be fixed, replaced, or installed before the certificate can be recorded.


Another big ticket item that an inspector may require is to blow new insulation into an attic. If your home is a newer build or has been sold in the last few years, this expense will likely be much lower than it will be in older homes, which can be quite expensive. What do we mean by expensive? A Victorian home we recently sold on Oak Street in Queen Anne required $2,000 in attic insulation prior to the sale! Keep these potential expenses in mind to be sure you aren’t caught off guard when applying for your certificate.


San Francisco City/County Transfer Tax - (Customarily Paid by Seller)

The city of San Francisco has a HEFTY transfer tax which is customarily paid by the seller. On homes sold between the prices of $1,000,000 - $4,999,999, sellers should expect to pay $7.50 for every $1,000 of the sales price.  This means that on a sale of $1.5M, the seller should expect to pay $11,250 at closing.

 

This is an expensive tax, and on sales $5,000,000+ the tax jumps by more than double! The transfer tax is a huge reason you’ll want to know the value of your home. Here’s a quick and simple way to check your home’s value.


3R Report - (Customarily Paid by Seller)

A 3-R report needs to be included in any Seller’s Disclosure Package and made available to any interested Buyer. This is basically a building permit history of the house, that helps the buyer make an informed decision. The 3-R report can be ordered online or over the phone at (415) 558-6080 to request a copy. This report costs $148 at the time this article was written. If you plan to list your house quickly, be sure to order this one right away. The 3-R report frequently takes up to two weeks to arrive.


*The above list is not meant to be a complete or exhaustive list of all costs paid by Seller to sell a home in San Francisco. Many other costs exist (broker fees, inspections, staging, etc.), but we find the above costs to be the most surprising to our sellers. For a complete list of costs to the seller, please call us and we can provide a detailed outline of all anticipated seller’s costs.


It's important to remember that virtually every cost in real estate is negotiable, but in San Francisco, the above costs are all typically paid by the seller.


If you would like to see an honest, comprehensive market analysis of your home, don't hesitate to call or email us today! We would love to put our experience to work for you


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