What's the true cost of selling a house?

Selling a house comes with its own set of costs, and if you’re a homeowner you may be wondering exactly how much you'll lose. Overall, you can expect to spend between 5% to 6% of your home's purchase price on real estate fees and anywhere from 2% to 5% on additional costs when you sell it.

It’s important to understand what's involved in a real estate transaction so you can plan ahead. To get an estimate on your selling costs, as well as how much you can make, use our Home Sale Calculator.

How much does it cost to sell a house?

Many costs of selling a house are necessary to ensure a seamless transaction that gets you the most proceeds on your sale. However, some of these costs are optional and dependent on your financial goals and circumstances. 

For a home worth $400,000 with remaining mortgage balance of $75,000, your total costs of selling the home may be around $120,000 based on these additional fees:

• Remaining mortgage balance: $75,000
• Agent fees: $24,000
• Closing costs: $5,000
• Concessions: $8,000
• Repairs: $4,000
• Moving costs: $4,000 

Total costs: $120,000 

1. Real estate agent commission

Agent commissions are usually the second biggest cost of selling a house. The listing agent handles setting your list price, preparing your home sale, scheduling home tours, and negotiating on your behalf. 

Home sellers handle the fee for their own listing agent, as well as the fee for the buyer’s agents. In total, the commission typically add up to about 5% to 6% of the home’s sale price. So, if you sell your home for $350,000, you could pay up to $21,000 in real estate commission fees. (The exact percentage can also vary depending on your area or property type.)

If you decide to sell your home without a listing agent, expect to take on the responsibility of paperwork, negotiating, and home showings. Although it’s possible to do, it can be more costly in the long run. By working with a licensed agent, you also get the benefit of expert guidance and market knowledge to make sure you’re making the most money on your home sale.

2. Mortgage payoff

For most sellers, the most significant cost of selling a house is the remaining balance on their mortgage. This is usually paid off with the proceeds of your home sale.

To get the most accurate payoff amount, which will vary for every person, it’s a good idea to call up your lender and ask; don’t just rely on your last billing statement. Though rare, some lenders also charge a prepayment penalty for paying off your loan early, so factor that in as well. 

Tip: Your mortgage payoff only includes the interest you’ve accumulated up to your closing date, not the lifetime interest of the loan.

→ Learn more about selling a home with a mortgage here

3. Closing costs

Home sellers are responsible for a share of fees and other expenses as part closing costs. Excluding agent fees, this may run anywhere from 1% to 3% of the final sale price.

Seller concessions

In a real estate transaction, buyers may ask that the seller pay for some of their closing costs as seller concession. A homebuyer might request a seller concession in their offer if they think the house is overpriced or if they want help covering the upfront costs of purchasing a home. 

In a buyer’s market, seller concessions can act as a bargaining tool, and in a seller’s market it can compensate for the cost of making higher offers. These costs can include the appraisal, inspection fees, lender fees, and more.

Title insurance and related fees

When you sell your home, you’ll usually need to hire a title company to transfer the title to the homebuyer. The title is a document that verifies your legal ownership of your house. As the seller, you’ll also likely need to pay for the buyer’s title insurance. Many title companies also offer escrow services, which they’ll include in their fee.

Property taxes, transfer fees, and HOA fees

When you sell your home, you’re responsible for local taxes and fees. Because you get billed for state property taxes only a few times a year, you’ll pay the prorated share of property tax that has accumulated since your last payment up to your closing date.

Depending on the location of your property, there may also be a transfer fee. This is a tax from your local government for transferring the ownership of the home. The exact amount you’ll need to pay can drastically vary from state to state. 

Lastly, if your neighborhood has a homeowners association (HOA), you’ll need to cover the HOA fees that you collect leading up to your closing date. You can also expect to pay a fee to your HOA to have them transfer your property over to your buyer.

Attorney fees

If you decide to hire a real estate attorney to review legal documents and complete the home closing, you’ll pay those fees at closing. Some states, such as New York, require the presence of an attorney, while others give you the option to choose. Depending on your scenario and the attorney’s hourly rate, you can expect to pay between several hundred and a thousand dollars.

4. Home improvements

To get your house ready to sell, it’s often a good idea to make some home improvements to boost your home’s appeal. You’ll likely spend money on things like cleaning, painting, staging the home, and landscaping.

These maintenance costs may run about 1% of the home price, but can vary greatly based on where you live, how big your home is, and what conditions it's in.

While this is an upfront cost of selling a house, you could potentially recoup this expense if the improvements increase your home’s value. Your real estate agent can provide guidance on what matters most so you skip certain fixes that aren't worth-while.

When you list Orchard, our Concierge Service manages home repairs for you with no upfront costs, and will only make recommendations that boost your home’s value.

5. Post-inspection repairs

Buyers may request repairs based on the results of the home inspection. (They can do this by negotiating a seller concession to cover the cost of any necessary repairs or ask that you fix the damage yourself before closing.)

You’ll be responsible for the price of these requested repairs and to avoid any unforeseen costs or delays in selling, you can consider getting a pre-inspection. These typically cost a few hundred dollars and can put you in a better position for negotiating with potential buyers.

6. Overlapping housing costs

It can be challenging to line up your closing dates for selling your old house and moving into your new one when you buy and sell at the same time. If you buy your new home first, you’ll have to pay for two mortgages, taxes, and utilities until your old home sells.

On the other hand, if you sell your current home first, you may end up paying for temporary housing or storage until you can find and close on your new home. You can save on these costs when you use Orchard — we'll help you buy before you sell. Get started with a free home evaluation — our estimates are 30% more accurate than leading estimates.

7. Moving costs

When considering the cost of selling a house, sellers often forget to budget for the move itself. The cost of your move depends on how much stuff you’re moving, how far away you’re moving, and whether or not you hire professional movers. 

If you decide to hire professionals, you can spend up to a couple thousand dollars.  For the DIY route your costs will include truck rentals, gas expenses, and packing supplies. 

→ Here’s what to do when moving out of a home

Home selling costs FAQs

Home sellers have a lot of questions about the costs of selling a home. Here are some of the most frequently asked questions, answered:

What are the average closing costs when selling a house?

Average closing costs for sellers typically range from 8% to 10% of the property's sale price. These costs encompass various fees associated with finalizing the real estate transaction. They include expenses such as home improvement and repairs, real estate agent commissions, title search and insurance fees, transfer taxes, attorney fees, and recording fees. The exact amount can vary based on factors like location, property value, and negotiated terms. To get a clearer estimate of closing costs for your specific situation, consult with a real estate professional or use online calculators to factor in these potential expenses.

Are there regional differences in selling costs?

Yes, there are regional differences in selling costs when it comes to real estate transactions. The expenses associated with selling a house can vary significantly based on the local housing market and geographical location. Factors such as property values, market demand, state and local regulations, and even the availability of real estate professionals can influence these regional disparities. For instance, high-demand urban areas might have higher closing costs and agent commissions compared to rural regions. It's crucial for sellers to research and consider these regional variations to accurately anticipate the costs associated with selling a house in their specific location.

Why is it so expensive to sell your house?

Selling a house is a complex financial transaction with many parties involved — all of whom need to get paid for their work. Additionally, preparing the house for sale, including repairs and staging, and marketing efforts can incur significant expenses to attract potential buyers. These combined factors make selling a house seem expensive.

How can I calculate net proceeds after selling costs?

Calculating net proceeds after selling costs involves a straightforward process. Start by determining the sale price of your house. Subtract any outstanding mortgage balance, including penalties if applicable. Then, account for real estate agent commissions and closing costs, including fees for titles, insurance, and taxes, which can vary. Lastly, factor in additional costs like repairs, staging, and outstanding property taxes. Subtract all these expenses from the sale price to get an approximate net proceeds figure.

Or, use our home sale proceeds calculator to crunch the numbers.