If you’re getting ready to sell your home, you may be thinking of the profits you could make. And while real estate is one of the most reliable assets to appreciate over time, the costs of selling that house can add up quickly. Generally, selling a house can cost the seller between 10% and 15% of the sale price.
What Are the Costs Associated with Selling Your Home?
“There are a few costs that sellers should be aware of prior to selling their home in order to make the best decision,” says Garret Pike, a real estate agent based in Southampton, New York.
“If you’re listing your home with a realtor, then there is most likely a commission-based payment that you’ll have to make,” says Pike. “Depending on the state you’re in, you may have to hire a lawyer to handle the contracts for you, which is a requirement in New York State. The remaining costs are anything that will either help you sell your home or any costs associated with cleaning out your home.”
Aside from commissions, home repairs, improvements and legal fees, a typical home seller can also expect to pay for closing costs, moving, staging and marketing. If your property has appreciated significantly in value since you purchased it, you could also be required to pay capital gains tax.
How Do Real Estate Agent Commissions Work?
Real estate agents only get paid when they help someone either buy or sell a house. For years, it’s been typical for a seller to hold the responsibility of paying the commission for both their listing agent and the buyer’s agent. Real estate commissions have always been negotiable, but the average rate is traditionally between 5% and 6%, which is then split between the buyer’s and seller’s agents.
However, this is changing. In October 2023, a federal jury in Missouri found that the National Association of Realtors (NAR) and other large brokerages worked to inflate commissions. As of August 17, 2024, sellers are not automatically responsible for paying both sides’ commissions.
What Will the Seller Pay in Closing Costs?
The seller will likely be responsible for line items such as title service fees, title insurance, a transfer tax, concessions, attorney fees and prorated property taxes.
“One of the main closing costs a seller will have to play for in New York State is the New York State real estate transfer tax, also known as deed stamps,” Pike says. “Sellers should also speak with their accountant to plan for any other potential tax, such as capital gains tax.”
Home Preparation Costs
While it’s technically optional to declutter and hire a stager, preparing your home for sale is well worth the money.
Cleaning and Staging
A clean, tidy home will show well in photos and spark more interest from house hunters. Staged homes typically spend less time on the market, and sellers who choose to stage may see more offers or offers above the original asking price. According to Angi, the average homeowner in the US spends around $2,000 on staging services, while a one-time deep clean can cost several hundred dollars.
“Some of the most common costs in preparing a home for sale are general house cleaning, dumpster fees and paint touch-ups,” Pike says. “Depending on which brokerage or agent you are using, a seller may also pay for professional photography, which can range from $250 all the way to $1,000.”
Repairs and Improvements
If you’re selling, you’re probably going to have to make some minor (or major) repairs and upgrades around the house before listing it on the market. These could include roof repairs, plumbing and electrical upgrades, HVAC and water heater servicing, landscaping and exterior repairs, window and door replacements, pest management, and much more.
To make this simple, Pike suggests hiring a home inspector prior to listing the house.
“A home inspection is often performed by a buyer once they have an accepted offer in order to find any issues the home may have,” the agent says. “By suggesting to a seller to order a home inspection prior to listing the home, they can get ahead of the curve and remedy any issues that a buyer might find later on.”
A well-maintained home with newer systems may not cost a seller much, but most sellers can expect to spend some money on improvements and renovations.
Cost-Saving Strategies
Some home sellers may not have the cash on hand to pay for things that don’t feel necessary, such as marketing or staging. Here are some expert tips on where it makes sense to save money and where you should plan to invest.
Where to Save Money
“The biggest tip that I would suggest to help reduce costs while selling your home is to DIY stage your home,” Pike says. “Most often people use their home and the furniture in it to work best for them, but it might not make sense to the buyers that are coming through. For example, you may have a formal dining room that you only ever used as some extra storage. While that works for you, clean out that room and set it up as a dining room so a potential buyer can see the vision. You don’t have to spend a lot to do this – be creative!”
Where to Invest
Most real estate agents suggest investing the money that you have on things that will have the best return on investment, such as repairs and necessary upgrades. A recently repaired roof and upgraded electrical will be attractive to buyers, and they may even be willing to submit a stronger offer if it means they don’t have to make those changes after move-in day.
“Efficiency and planning ahead is what I stress to every client when selling their home,” Pike says. “Be ahead of the curve. Have the yard sale prior to listing the house, fix those little things that you’ve been meaning to fix, clean out the pantry and closets. These are things that you’re most likely going to do anyway, so do them before and it’ll make your home that much more presentable and sellable.”
Drawbacks to Cost-Saving
While saving costs may seem like a win-win, there are some drawbacks. Staging is often the first thing that sellers will forgo to save some cash, but professionally staged homes often spend less time on the market and they may go for above the listing price.
A home in desperate need of repairs will often sell for significantly less than if those repairs were made prior to listing, as many buyers want to be able to move in right away without having to spend additional money on renovations.
The Bottom Line on the Cost of Selling a Home
Selling your home can become expensive quickly. From closing costs and legal fees to repairs and cleaning, there are a lot of line items associated with putting your home on the market and finally transferring the title to its new owner.
It’s best to be well-informed prior to listing your home, as these costs are expensive. Before making any major changes, talk with your real estate agent. They’ll be able to help determine your costs and advise on the best strategy for a profitable home sale.
A home valuation report can also give you an estimate as to how much your home is worth.
Grace Cassidy is a freelance writer covering the beats of real estate and interior design. She served as the final editor of Curbed Hamptons, and has bylines in publications such as Apartment Therapy, Zillow's Out East, Cottages & Gardens, and more. Originally from Long Island, Grace lives in San Diego.
