How Much Does it Cost to Sell a House?

6-12% of Selling Price

The cost to sell your home is based primarily on the selling price, with the highest amount (5-6%) being paid in fees to the Realtors. Other expenses like closing costs, title search, inspection fees and others are mostly negotiable between the buyer and seller.
Last Updated: Friday, November 5, 2021

house for sale with sign out front


Determining the Costs Associated with Selling Your Home

If you are like many others who are preparing to sell houses, you may see dollar signs. After all, your current home value may be significantly higher than the outstanding loan balance. Unfortunately, however, the difference between the sales price and your loan payoff amount does not reflect your total profit. There are many costs associated with selling your home that will impact your finances.

A reasonable estimate for these costs is roughly 10 percent of the sale price, but your actual expenses can vary significantly. You understandably want to create a solid budget as you prepare to sell house, so a deeper look at the costs of selling a house is in order.

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Pre-Listing Expenses

These are the costs for preparing your home to show to a Realtor. Costs for cleanup, organizing, creating or improving the curb appeal, etc.

You will undoubtedly incur numerous expenses before you consult with a real estate agent and list your home. Your home will directly compete against other comparable homes on the market in your area. Ideally, it will stand out and get noticed for all of the right reasons. With this in mind, selling a house as-is often is not feasible. After all, you have lived comfortably in your home, and it shows clear signs of wear.

If you do choose to sell your home as-is, you should still plan to have it professionally cleaned on the interior. You may also find that paying a landscaper to power wash hardscape surfaces and to thoroughly spruce up your yard is well worth paying. The cost of interior and exterior cleaning and tidying may cost up to $500 to $1,000 depending on the size of the projects. Here are details on these types of Pre-listing Expenses:

Before you decide which expenses to tackle upfront before listing your home, consider the benefit of ordering an optional inspection report. Your buyer will likely order an inspection report, so he or she will be aware of all pending repair issues and outstanding maintenance needs. In some cases, a lengthy inspection report can scare off a buyer, or it may trigger negotiations. Tackling some of the issues upfront can pave the way for a smoother transaction. In addition, the inspection report may be used as a selling point if it shows a clean bill of health. Depending on the size of your home and its location, you could pay between $200 to $700 on the inspection.

Some of the needed repairs the inspection might uncover – and better now than later – include:

Our guide Sell Your House Fast: 21 Things You Must Do Before Listing has other no-cost or low-cost ideas for getting ready to sell. There are a lot more ideas in our Improvement Guides that will help you prepare your home to be as attractive to buyers as possible.

Realtor Commissions

These fees are determined by your Realtor and the buyer Realtor.

As a seller, you should expect to pay the commission for your real estate agent and for the buyer’s agent. A good rule of thumb is to estimate six percent of the sales price for this expense. This may be negotiable to a degree. However, keep in mind your real estate agent will pay for all marketing-related expenses out of his or her commission. Because of this, a Realtor’s fee cannot be viewed as pure profit.

They are not usually negotiable unless you use the same Real estate firm to handle the purchase of your new home as well.

Home Prep and Staging Expenses

Prep and Staging is the act of furnishing your home to give buyers an opportunity to envision the use of each area and room.

Staging your home is not a required step in the sales process, but it can help you to sell your home more quickly and for top dollar. The staging process involves removing all signs of personalization in the home, so many homeowners will need to rent a storage unit for the duration of the listing period. This storage unit will hold everything from personal décor and mementos to family heirlooms, extra furnishings and more. The cost will vary by size and location, but a good rule of thumb is to estimate $100 per month.

Depending on your situation, you may need or want to invest in new drapes, home décor that has more universal appeal and other items that your real estate agent or staging expert recommends. Some people rent furnishings as well, but others simply reposition furnishings in their home so that the space is aesthetically optimized. Generally, you should expect to spend up to one percent of the sales price on staging.

If you’re downsizing, consider giving away or selling unwanted items. And renting a dumpster for the rest is a hassle-free way to dispose of items.

Our Budget Friendly Landscape Projects for Front and Back Yard guide can help you spruce up landscape without spending a bunch. Remember to keep it fairly plain but neat and tidy rather than something complex the new owner will view as “someone else’s landscape ideas.”

Negotiable Costs

There are several expenses that buyers and sellers commonly negotiate. For example, a buyer may ask you to pay for a home warranty, the property inspection, the survey and the appraisal. Keep in mind that you do not need to make concessions in these areas. In a hot seller’s market, the buyer may not even attempt to negotiate on these points. However, it is smart to estimate approximately one to two percent of the sales price toward these and other negotiable costs.

Non-Negotiable Costs

There are some closing costs that are the responsibility of the seller. For example, the seller is responsible for paying all outstanding expenses or payments related to the property. This could include outstanding HOA dues, outstanding property taxes and even liens. Generally, taxes and HOA dues will be prorated so that the seller only pays for expenses through his or her ownership period.

In addition, the property’s title must be clear before the property can be conveyed. Related expenses are usually the seller’s responsibility. The process involves the title company’s agent or the attorney conducting a title search, and the cost is between $100 to $200 approximately. Unrecorded liens against the property will also be researched, and the cost for this is approximately $100 to $200 as well. These liens include everything from outstanding utilities balances to HOA code violations and more.

The seller is usually responsible for title insurance as well. Title insurance gives the buyer some level of protection in the event that a title discrepancy or a related issue arises after the sale has been finalized. The cost of title insurance varies by location and by the sales price. However, you can reasonably expect to pay between $1,500 and $4,500 on this expense for most homes.

Some states specifically require attorney participation with the closing, and others allow closing to take place at a title company or escrow company. Regardless of your state’s requirements in this area, you will be required to pay the related legal or settlement fees. Attorney’s fees or settlement fees often cost less than $1,000, but the actual cost varies. In the event a legal issue arises related to a lien or the sales contract, your legal expenses can rise dramatically.

Minor Repairs and Improvements

Minor repairs and improvements are a part of selling most homes. Even if you are thinking about selling a house as is, a buyer may ask you to make some repairs prior to closing or to provide a repair allowance. Some of the lighter expenses that you may need or want to focus on are pressure washing, painting, replacing cabinetry and door hardware, updating lighting and upgrading plumbing fixtures. While these are generally less expensive repairs and improvements that can make a significant difference in the appearance and condition of a home, the costs can add up.

Common Minor Repairs

The goal here is to focus on curb appeal and safety outside and an uncluttered, “everything is in working order” image indoors. In addition to those noted above as Pre-listing Expenses,

Major Repairs and Improvements

Are you aware of significant damage to your home or the need to replace or repair a major system? Damage to the roof, the HVAC system, the electrical system and the plumbing system can be red flags for lenders. The property inspector, the appraiser or both may identify these issues and detail them in a report that is distributed to both the buyer and the lender. With this in mind, it may be best to address some of these issues before listing the home for sale.

An alternative is to wait for a buyer to approach you for negotiations on these issues and possibly reach a concession offer for specific repair or replacement amounts that are negotiated before closing.

Common Major Repairs

These are issues that will stop a deal pretty quickly if not addressed. Or if you end up in a “must sell” situation, cost you more in terms of lost home value than the repairs are worth when done proactively.

Bank or Lender Expenses

Before the sale can be finalized, your lender will need to release its lien on the property. To do so, all of your contractual obligations to the lender must be satisfied. In many cases, the primary obligation involves paying off the remainder of the loan balance. You may also be responsible for prepayment penalties and other transaction fees.

You can request an estimate for the full payoff balance on your loan by contacting your lender directly. Your attorney or title agent will make the payments on your behalf, so you generally do not need to worry about making a payment directly to your lender.

Taxes & Escrow

As discussed, you are responsible for paying property taxes through your ownership period. However, this is not the only tax that you should plan ahead for. For example, some states charge a transfer tax. An additional and related tax may be assessed at the municipal or county level.

After closing, the matter of capital gains tax must be addressed. There are exemptions available. For example, if you have lived in the home for two of the last five years, the first $250,000 for single filers or $500,000 for married or joint filers may be exempt. Because capital gains tax can be so hefty, this is an expense that you should be aware of before you sign your closing documents.

Moving Expenses

A discussion on the cost of selling a house would not be complete without a word on moving expenses. After all, you must move out of the house before you can finalize the sale. Moving expenses vary dramatically depending on the distance of your move, how many items are being moved and if you plan to do any of the heavy lifting yourself. Generally, however, you should estimate between $2,000 to $8,000 for moving expenses. You may also need to budget for utility deposits, rental deposits, a down payment or other related expenses as well.

You can see that the cost to sell home can be much higher than you may have initially anticipated. However, the good news is that there are opportunities to save money. For example, you can negotiate with your real estate agent and buyer on various points. You can also compare estimates from various contractors for cleaning, repairs, upgrades and more. Now that you understand the true costs associated with selling a home, you are ready to confidently take the next steps.