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Cost Of Selling A House: A Seller’s Guide

7-Minute Read
Published on May 22, 2023
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Whether you’re upsizing, downsizing or relocating for work, selling your home can be simultaneously exciting, stressful and profitable. Managing a home sale without costs spiraling upward is challenging but necessary to keep your move affordable and potentially lucrative.

How much it costs to sell a house depends on various factors of your specific situation. In almost all circumstances, selling your home isn’t cheap – but fortunately, profit from a home sale can offset expenditures such as real estate agent commissions and moving costs. Here are the details of how much selling your home will cost and how you can efficiently navigate the process.

How Much Does It Cost To Sell A House

Selling a house typically costs 10% – 15% of your home’s sale price. Of course, costs vary depending on the house and whether the market favors buyers or sellers. Today’s market is an even playing field between buyers and sellers.

What Are The Costs Of Selling A House?

Although selling your home can be profitable, you’ll have to foot several bills to make your home presentable and close a deal. The costs can add up quickly, including:

Repairs

Most home purchases include an inspection contingency, which allows buyers to have a home inspection before they buy the property. As a result, you may need to make repairs based on the inspection findings and what the buyer wants. Otherwise, the buyer can back out of the contract without penalty.

The average cost of sellers’ home repairs is often reported to be roughly $3,500 – $5,000. However, there is no consensus on these figures, and much depends on whether the repairs you need can be done DIY-style or require the help of professionals. While the cost of repairs can lighten your wallet considerably, the repairs usually pay for themselves by increasing your home’s value and drawing in more buyers.

Mortgage Payoff

If you are still paying on your mortgage, you’ll have to pay off your mortgage with the profit from the home sale. Ideally, you’ll have a low enough balance where you can repay it and have money left over for a down payment on the home you move into.

Whether your home sale helps you address your mortgage or not, paying off your mortgage is necessary for selling your home. Otherwise, you can’t complete the transaction because your lender holds a lien against the home that only goes away once you satisfy the mortgage balance.

Lastly, if you’re selling your home after just a year or 2 of ownership, some lenders charge extra fees for paying off the loan early. This expense could cost you 2% of your mortgage value. Please note that our friends at Rocket Mortgage® do not charge early repayment fees.

Taxes

Unfortunately, real estate transactions aren’t immune to taxes. For example, you might pay for the following:

  • Property taxes: You’ll typically owe property taxes on your home until closing day, possibly longer if you make a concession in your deal with the buyer. However, in typical circumstances, your municipality will prorate the taxes and split them based on when ownership transfers to the buyer.
  • Transfer taxes: These cover government processing of the real estate transaction. Like with property taxes, the amount of transfer taxes depends on your region.
  • Capital gains taxes: These rarely come into play when selling your home. However, if you have lived in your home for less than 2 years, are selling a vacation home, selling an investment property or your home’s value has grown by over $250,000 (or $500,000 for joint tax filers), you might owe 15% of the home sale in capital gains taxes.

Real Estate Commissions

The real estate agent helping you sell your home will earn real estate commissions for their effort. Usually, your REALTOR® as a seller and the buyer’s agent will split 5% – 6% of your sale price. This percentage is also shared by the agents’ brokerages and other parties, depending on what state you live in. That’s $12,500 for a home that sells for $250,000, which can seem steep, but the cost is worth it.

While it’s possible to sell your home on your own, real estate agents provide significant advantages like:

  1. Streamlining the sale to save you time and money.
  2. Many buyers’ agents won’t show homes an agent isn’t representing.
  3. Your agent can make informed recommendations on how to get your home ready for showing. For example, your agent could steer you away from a pricey renovation or landscaping project that wouldn’t boost your home value significantly.
  4. A real estate agent worth their salt is an expert negotiator who can help you get the best deal.

Buyer’s Title Insurance

Buyers often purchase title insurance to cover problems with property ownership that could hinder the transaction. For example, a public record might hold a false claim against the property from an old resolved dispute.

Sellers often pay for a buyer’s title insurance as a concession to sweeten the deal for the buyer. You can expect to pay roughly 0.5% – 1.0% of the home’s price, depending on your locale and your insurance company.

Closing Costs

Closing costs include taxes, title search, insurance, escrow fees, plus any fees you agreed to provide the buyer. For example, you might pay origination fees, appraisal fees and mortgage points on the buyer’s behalf. Closing costs range up to 6% of the sale price.

Optional Costs Of Selling A Home

While costs for selling your home can accumulate rapidly, the following factors can help you sell your home quickly and for the top price. Wise homeowners will evaluate their options and decide which will expedite their transaction.

Pre-Inspection

A pre-inspection is an inspection a seller pays for before listing their home. While most buyers will conduct their own inspection, a pre-inspection helps you ascertain your home’s condition and proactively take care of glaring issues. As a result, this option can help speed up negotiations once you get an interested buyer at the table.

A pre-inspection usually costs $300 – $500. Of course, if it reveals any problems, you’ll have to pay for those necessary repairs.

Staging And Photography

Staging and photography help present your home in its best light. A beautiful set of furniture and professional-grade pictures of your home can inspire a buyer’s imagination and get them to the closing table.

While you can stage your home and take photos yourself, you’ll be busy moving out your furniture, managing the sale, and looking for a new home. Therefore, having top-notch photos of a home furnished with your possessions can be impractical.

Prices for these photographing and staging services can vary depending on how many rooms you want to stage and whether you will need to borrow a rental set of furniture. On average, you can expect to pay $300 to $600 per month for an initial design consult, followed by $500 – $600 a month per staged room.

Seller Concessions

Seller concessions are ways you can help the buyer with closing costs. Depending on the state of the market, seller concessions can include the following:

  • Property taxes for the rest of the year
  • Title insurance for issues surrounding ownership, liens and incorrect municipal records
  • Origination fees for the buyer’s lender to create the new mortgage
  • Buyer’s home inspection and appraisal fees
  • Recording fees your city or county charges for recording the property transaction
  • Mortgage points to lower the buyer’s interest rate

Your real estate agent can help you discuss concessions with the buyer. While concessions may seem like an uncontrollable cost, housing regulations cap concessions at the amount of the seller’s other closing costs. Therefore, if your closing costs are $7,000, you can provide the buyer a maximum of $7,000 worth of concessions.

Moving Expenses

Selling your home means moving into a new one. As a result, your moving expenses will depend on your needs and preferences.

  • The average moving company costs $1,250 for a local move and $4,890 for a long-distance move, but this depends on how far you’re moving and how many items you have to move.
  • If you want a company to pack your possessions, you’ll pay an additional $280 to $2,500 (the average prices for a two-to-four-bedroom home).
  • A storage container or moving pod will likely cost $225 to $830 for a local move and up to more than $2,130 for a move over 250 miles away.
  • If you’re taking care of moving yourself and only need a vehicle, a truck will cost approximately $150 – $300 for a move close by and about $1,750 for long-range transportation.

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How Are A Seller’s Costs Paid?

At this point, you might be wondering how a seller can profit from a sale with all these expenses. Fortunately, your home sale will likely cover these costs and leave you with extra cash for your next purchase. Some expenses, like your real estate agent’s payment, come directly from the home sale in all situations. Others, like staging and photography, will come from you initially and ideally be recouped after closing.

However, your home sale may not completely cover your costs. In that case, you’ll have to come out of pocket for any outstanding fees.

Costs To Sell A House FAQ

Let’s take a look at some frequently asked questions regarding how much it costs to sell a house.

How much does a seller have to pay in closing costs?

Closing costs for the seller are typically about 6% of the sale price. For example, if you are selling your home for $300,000, you can expect to pay close to $18,000 in closing costs.

Is it possible to lose money when I sell my home?

You can lose money while selling your home if you still owe more money on the mortgage than the home is worth. You also run the risk of losing money to capital gains tax if you’re selling a home you bought less than 2 years ago.

What do real estate agents typically charge to sell your home?

The real estate agent who helps you sell your home will typically earn 5% – 6% of your sale price.

The Bottom Line

Selling your home might seem daunting, and it’s a good idea to create a budget to keep your expenses under control. All expenses considered, you could spend 10% – 15% of your home sale price to sell it.

While this figure means reduced profits from the sale, you can spend wisely to accelerate the process and make the most of the transaction. Additionally, you’ll more than make up for the costs of selling through the sale price in many cases. That said, you may need to pay out of pocket for selling if your home’s value doesn’t cover the difference.

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Headshot Ashley Kilroy

Ashley Kilroy

Ashley Kilroy is an experienced financial writer. In addition to being a contributing writer at Rocket Homes, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.