Selling homes on Long Island: Taxes, fees, hidden costs

When retirees Sue and JC Eithier had to sell the home of Sue's late father, a real estate agent suggested listing it in the low $800,000 range in as-is condition.

"We knew that wasn't what we were going to do," said Sue.

Instead, the Eithiers, of Northport, said they spent about $12,000 improving the Port Washington home, patching and painting the walls along with other aesthetic improvements. While a surprise expense of removing potential asbestos upped their spending to a total of $28,000, the Eithiers said this investment came back to them five times over.

"So we listed the house at $950,000, and we sold it at $950,000," Sue said.

Long Islanders contemplating selling their homes will have a clearer picture of their potential profits if they know in advance how much they are expected to shell out to see the transaction close, including fees that can't be avoided. Market conditions are in their favor: there are historically low numbers of Long Island homes on the market and median home prices reached $810,000 in Nassau County and $670,000 in Suffolk in January, according to OneKey MLS, the multiple listing service that covers Long Island.

While sellers could simply list their as-is home and expect it to sell, real estate agents say that making improvements can ultimately boost their bottom lines.

Homeowners "could opt to not do the work and have the house show a certain way, but risk either not getting fair market value or top market value or having it sit on the market for longer," said Beth Catrone, an associate real estate broker with Daniel Gale Sotheby's International Realty who worked with the Eithiers.

"Buyers in this area are educated. They're smart. Even though there's a shortage, they're going to wait for the shiny house to come on versus the house that looks tired and dull," Catrone said. "A good house that presents just stands out above the rest."

Here is what Long Islanders could expect to pay to sell their homes, broken down by category:

A fresh coat of paint

There's a category of costs that many home sellers may not have considered, which, although optional for the sale to go through, could bring a significant return on investment for sellers willing to open their wallets. These are the costs to stage a home and give potential buyers the impression that all they need to do is simply move their stuff in and enjoy their new home.

Eithier said that the circa 1950s home of her parents, who died last year, had been fairly well maintained over the years thanks to her father. The yard, which has a pond, didn't need any work, nor did the garage. The three-bedroom, two-bathroom split-level ranch, where Eithier grew up, had the major advantage of being only a 10-minute walk from the Port Washington Long Island Rail Road station. Compared to other split-level ranches in its development, though, the home had the smallest layout.

With the goal of getting the home on the market by January 2024 to take advantage of a lack of competition, the first order of business for the Eithiers was emptying the home, taking out all the furniture Sue's parents had accumulated over the years. They estimated they spent about six hours per day, six days a week working on the home over three weeks.

The Eithiers removed carpet, applied a finish to hardwood floors, changed light fixtures and hired an electrician for some minor work, replaced some old appliances and re-caulked the bathrooms. They also cleaned the brickwork and cut the bushes around the house. If they didn't know how to do something, they said they watched YouTube tutorials to learn. At Catrone's urging, they hired painters for about $12,000 to paint all the rooms white, and had the fireplace mantle painted black.

With "the white and the black, it looked like an entirely different house," Eithier said.

Another homeowner who ensured his house gave that move-in ready impression was Andy Bonadio, of Locust Valley. He made significant improvements to his former three-bedroom, 2½-bathroom Douglaston Tudor as soon as he bought it in 2016, and spent more in anticipation of the sale in the hopes of raising its price. He spent about $2,000 to patch and paint the walls of the home and an additional $3,000 for professional landscaping.

The retired New York Police Department Emergency Service Unit officer said he relied heavily on his real estate agent to get the home ready for the sale. A couple of years after he purchased the home, he and his now ex-wife started divorce proceedings. Without access to the home, he tasked his real estate agent with checking to make sure the home was cleaned, that HVAC filters were replaced and to check inside the toilet tanks to ensure everything was in working order. Bonadio said these "little things" can make a big difference.

"That house was absolutely perfect when it came time to have the open house," he said. "I believe at the end of the first day, [my real estate agent] had four offers over asking — it was a tremendous amount of money."

The surprise expenses

The Eithiers' efforts paid off — at first. After they received an offer that was close to $1 million, vermiculite, a material linked to asbestos, was discovered and the sellers walked away. Test results confirmed it wasn't asbestos, but the Eithiers opted to remove the material anyway. It cost them $16,000, as well as their second buyer, who was also scared off by the potential of hazardous material in the home.

Ultimately, another buyer who previously showed interest returned to the table, offering the list price of $950,000. The transaction closed in May.

Sellers could be on the hook for potentially thousands of dollars of repairs if home inspections turn up any nasty issues hiding in plain sight, such as fixing the foundation or removing mold. In most cases, sellers will have to eat these costs to see the transaction through. Other unexpected costs could also include satisfying any liens on the property.

In Bonadio's case, a surprise expense appeared during the process to modernize the Douglaston home. He purchased the home for $650,000 after the seller reduced the price by $200,000 because of a suspected crack in the foundation (it turned out to not be a serious issue). Then, Bonadio had the basement finished, adding heavier insulation to its walls, replacing the furnace, adding two bathrooms and installing radiant heat. He also commissioned electrical work around the house totaling about $100,000, and replaced the roof for $30,000. The discovery of a lead water pipe led to a $10,000 job to replace it.

In all, Bonadio estimated he spent about $450,000 completely modernizing the circa 1919 home.

Listed in May for $1.28 million, the home sold last year for more than double the purchase price: $1.32 million. The transaction closed in September.

Be prepared to sell

Selling a home always comes with costs. Between attorney and real estate agent fees, taxes and mortgage-related expenses, sellers should expect to spend thousands to ten of thousands of dollars on these costs, depending on the closing price of the home.

But, as in the cases of the Eithiers and Bonadio, investing money into a home to give it that "move-in ready" impression will go a long way toward increasing the price buyers are willing to pay, experts say.

"You have to go toward an audience," said Nikki Sturges, associate real estate broker with Daniel Gale Sotheby's International Realty. "You have to try to depersonalize [a house] so that you can get more buyers interested in the home. If they feel as though the house fits their needs and is in good condition, they are willing to pay the price."

Sue Eithier echoed this sentiment. "We really had to step back and say, it's not about what we would want in the house," she said. They needed to "look at it and think, these are people coming from the city, they're young buyers and they want to put their toothbrush in the cup and that's it."

That said, there are ways for sellers to reduce their costs. If time allows, sellers could take on much of the work themselves, like the Eithiers did. When hiring movers, call around to a few companies to get the best rates.

Storage is one expense on which people can easily save, Flowers said.

"I have clients that are low income, and they tell me that they have storage units for $500 a month," she said. "Throw that stuff away, OK? Be realistic. You're not going to use the furniture again. If you have to downsize, do not save rooms of furniture. You're not going to get it into a two-bedroom apartment."

One question Long Island's prospective home sellers may ask is whether they can save money by not hiring a real estate agent. While it is entirely possible for owners to sell homes themselves, research from the National Association of Realtors found they may see slimmer profit margins than those who hired a real estate agent. The median price across the country of a home sold by an owner was $380,000 in 2023, compared with the $435,000 median selling price of all homes. Having an expert help stage the home plays a big part in that difference.

"There are many things that go into getting a house ready for market," Catrone said. "I really wish that every seller realized how important it is to put money into getting their house ready for market. Because the more they do, I believe the more return that they will get."