How much does it cost to sell a house?

Home sales cooled earlier this year, according to the National Association of REALTORS® (NAR), but could pick up if interest rates continue to drop. The Federal Reserve is expected to announce an interest rate cut in September, which may result in lower mortgage rates for prospective homebuyers. 

Sellers who plan on listing their homes should be aware that the costs can quickly add up, even before you receive an offer. The hidden costs of selling a house, like unanticipated repairs, staging and photography expenses, and moving your possessions, can cost a large part of your overall profit.

What are the typical costs of selling a house?

According to Realtor.com, a homeowner selling their property will typically pay closing costs which include:

• Loan payoff costs
• Transfer taxes and recording fees
• Title insurance fees
• Attorney fees

Commission costs may be negotiated following a $418 million settlement NAR agreed to earlier this year. Previously, buyers’ and sellers’ agents would split a commission of about 5% to 6% from the home’s sale. The new rules allow the buying agent’s commission fees to be determined upfront between the buyer and agent or negotiated with the seller. If you’re selling your home, commission fees won’t be included when the property is advertised on the multiple listing service (MLS).

How much do real estate agents charge to sell a house?

Typically, a real estate agent’s commission depends on the home’s sale price; for example, $20,000 to $24,000 for a $400,000 property. If you’re selling your home, you would pay a portion of the proceeds to your agent and to the buyer’s agent. These commissions might be reduced significantly as new rules dictate that sellers will not be legally bound to pay a commission to the buyer’s agent. However, the seller and buyer can still privately discuss and agree to the seller contributing to the buyer’s broker’s commission.

What are the seller’s closing costs?

Realtor.com estimated that a seller will pay about 6% to 10% of the home’s selling price in closing costs. A seller’s closing costs might vary by state or based on negotiations with the buyer. Some states, like New Jersey, charge the seller a Realty Transfer Fee and may require the seller to pay an estimated tax at closing. 

Closing costs could also include: 

• Escrow fees
• Homeowners association (HOA) fees
• Pest inspections
• A home warranty premium
• Repairs for issues found during the home inspection

How much do home repairs cost when selling a house?

Home repair costs are difficult to anticipate until you and the buyer have reviewed the home inspection report. American Family Insurance suggests allocating about 5% of the house’s sale price to repair costs. 

A home inspection will typically require close examination of the following areas:

• Roof condition
• Plumbing
• Electrical system
• Heating/air conditioning
• Structural soundness
• Attic and basement 

You might have to fix any significant issues the inspector identifies or reduce the price to compensate the buyer for handling the repairs later. 

Some insurance companies may require older homes to have plumbing, HVAC, wiring, and roofing updated prior to issuing a policy. While some states, like Florida, don’t allow an insurer to reject a policy based on the roof’s age alone, insurers can require repairs or replacements for certain damages before approving coverage. 

Repair costs will range significantly based on the type of repair. The American Society of Home Inspectors estimated that a complete roof replacement in 2023 cost between $5,000 and $12,000, while repair costs ranged from $500 to $900 depending on the extent of damage.

What are the costs of staging a home?

Staging helps buyers easily picture themselves living in a home, which improves your chances of selling at a higher price.

The New York Institute of Design notes that while some staging companies will charge fees as low as $30 per hour, these tend to be amateur companies with employees who may or may not be formally trained. Staging consultations with professional teams could cost between $250 and $800 for a two-hour session. The home staging costs will likely start at $1,000 minimum and could easily rise to around $10,000 depending on experience, the value of items, the size of the house, and the location of the home.

What are the moving costs when selling a house?

Moving costs vary based on your situation. Factors like the size of the house, the distance between houses, and the increased care for specialty items (like moving a grand piano, for instance) could influence the price. 

There is no set range of moving costs when selling a house, but data gathered across service providers on the Angi marketplace suggest that local moves range between $879 and $2,555 while long-distance moves can range from $2,700 to $10,000. 

How much does it cost to sell a house FAQ

Are there any hidden costs when selling a house?

Some homeowners aren’t aware of the costs associated before, during, and after selling a home. Hidden costs are typically those which aren’t necessarily undisclosed, but rather, expenses that a seller doesn’t anticipate. 

For example, the cost of staging, improving landscaping, and professional photography might be more expensive than you think. Repair costs, especially those requested by the prospective buyer, can also come as unexpected expenses.

Some sellers will have to pay a capital gains tax if their home’s value is significantly more than when they purchased it. Aside from the closing costs, the seller may need to pay for certain items following the closing of the sale, such as the utilities charged while selling the home or any other bills in their name prior to transferring service to the new owner. 

Can I sell my house without a real estate agent to save money?

One way you can reduce the costs of selling your house is to avoid using a real estate agent or broker. Until recently, sellers would typically pay not only the commission for the real estate broker selling their home, but also the commission for the buyer’s agent when they used a REALTOR®. Although this 6% commission will now be lower, you can still save money by selling your home as a for sale by owner (FSBO) to avoid brokerage fees. 

How can I reduce the costs of selling my house?

Choosing to sell a home yourself rather than use a real estate agent isn’t the only way you can reduce the costs of selling your house. You can opt to show your home empty, rather than staging it. You can also limit your repairs and renovations to those that add the most value to the home; you could also sell your home as is. Remember that while there’s no guarantee that repairs, renovations, and staging will increase the value of your home, minimal investment in the home’s sale could also impact its value in the eyes of buyers. 

What are the tax implications of selling a house?

According to the IRS, many sellers may be eligible to exclude part or all of their primary home sale’s gain on the current year’s tax return. For example, single taxpayers could potentially exclude up to $250,000 of the gain while joint-filing taxpayers could exclude as much as $500,000. If the gain of the sale is equal to or less than these amounts, the seller doesn’t need to report this gain on their tax return unless they’re given a 1099 form. 

This doesn’t apply to vacation homes, rental properties, or a home that isn’t the owner’s primary residence. Keep in mind that while the gains are considered exclusions, you must report if that home received any type of canceled or discharged mortgage debt

How do closing costs differ for sellers and buyers?

Both the buyer and seller are responsible for closing costs when a home is sold. According to the Consumer Financial Protection Bureau, most buyers will pay appraisal fees, tax service provider fees, title insurance, government taxes, and prepay for property taxes and homeowners insurance. According to Realtor.com, most sellers will pay for both the buyer and seller’s real estate agent commissions, attorney fees, title insurance fees, loan payoff costs, property taxes, transfer taxes, and recording fees. There is overlap between who may be responsible for certain costs, and you can potentially negotiate who covers these expenses.