Costs of Selling a Home

When deciding to sell your home, it’s easy to focus on the potential profit. However, understanding the various expenses involved in the process is crucial. These costs can significantly impact your net gain from the sale. Here’s a comprehensive guide to the key costs of selling a home.

Real Estate Commissions

One of the most significant costs of selling a home is the real estate agent commission. Typically, this fee ranges from 5% to 6% of the sale price and is split between the seller’s and buyer’s agents. For example, if your home sells for $300,000, you could be paying up to $18,000 in commissions. While it’s a substantial amount, an experienced agent can help you get a better price for your home and manage the complex paperwork and negotiations. There are some services that do offer cheaper listing, like 1% lists, but you still likely have to pay the agent that brings the buyer 2.5%–3%, so the savings are fairly minimal.

Home Repairs and Improvements

Before listing your home, you might need to invest in repairs and improvements to make it more appealing to buyers. These can range from minor fixes, like repairing a leaky faucet or repainting walls, to more significant renovations, like updating a kitchen or bathroom. The cost of these improvements varies widely, but even small changes can enhance your home’s value and speed up the sale.

Staging Costs

Staging a home involves arranging furniture and decor to showcase the property’s best features and make it more attractive to potential buyers. Professional staging services can cost anywhere from a few hundred to several thousand dollars, depending on the level of service and the size of your home. Well-staged homes often sell faster and at higher prices, making this an investment worth considering. I typically pay $2,000–$2,500 for the dining area, living room, master bedroom, and a few decorations in the hall and baths.

Closing Costs

Closing costs are fees associated with finalizing the sale of a home. These can include:

  • Title insurance: Protects against future claims to the property.
  • Escrow fees: Charges for the services of the escrow company, which handles the funds and documents during the transaction.
  • Attorney fees: Legal fees if you hire an attorney to oversee the sale.

These costs can add up to 1% to 3% of the sale price. It’s essential to budget for these expenses to avoid surprises at closing. These costs are sometimes paid by the seller, sometimes split between the buyer and seller, and sometimes paid completely by the buyer. It is a part of the negotiations that many people don’t think about when considering the costs of selling a home.

Pre-Sale Inspection

While not mandatory, a pre-sale inspection can identify potential issues that buyers might find during their inspection. Of all the costs of selling a home, this is the least common. Addressing these problems beforehand can prevent last-minute negotiations and delays. The cost of a home inspection typically ranges from $300 to $500.

Moving Expenses

Once your home is sold, you’ll need to move your belongings to your new place. Moving costs can vary greatly depending on the distance, the amount of stuff you’re moving, and whether you hire professional movers or do it yourself. On average, moving locally can cost between $500 and $1,500, while long-distance moves can run into several thousand dollars.

Capital Gains Tax

If you’ve owned and lived in your home for at least two of the five years before selling, you may be eligible to exclude up to $250,000 ($500,000 for married couples) of the capital gain from your income. However, if your profit exceeds this exclusion, you’ll need to pay capital gains tax on the excess amount. You also will have to pay tax if it was an investment property that you have not lived in. Consulting with a tax professional can help you understand your specific situation and any potential tax liabilities.

Mortgage Payoff

If you have an outstanding mortgage, you’ll need to pay it off when you sell your house. The payoff amount is typically higher than your current loan balance because it includes any interest accrued up to the payoff date and any prepayment penalties that may apply.

Utility and Maintenance Costs

Until the sale is finalized, you’re responsible for maintaining the property and paying for utilities. Keeping the home in good condition, ensuring the lawn is mowed, and paying for heating, cooling, electricity, and water can add up, especially if your home stays on the market for an extended period.


Selling a home involves numerous costs that can impact your overall profit. By understanding and planning for these expenses, you can make informed decisions and minimize surprises along the way. Whether it’s agent commissions, repair costs, staging, or closing fees, being prepared ensures a smoother and more successful home selling experience. For more detailed insights into the costs of selling a home, feel free to reach out to our team of real estate professionals.

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