What does it cost to sell a house? When considering selling your house, it’s natural to focus on the potential profit. However, keep in mind that not all the proceeds will be yours to keep. Selling your valuable asset involves several expenses, including taxes and closing costs. This all sums up as the cost to sell a house.

So, how much does it actually cost to sell a house? The answer varies based on the home’s sale price, your location, and your negotiations with the buyer. Typical costs include real estate agent and attorney fees, title-related charges, taxes, and various administrative expenses associated with finalizing the sale. If you have a mortgage, expect additional charges from your lender as well. Being well-informed and prepared can help you avoid any unexpected costs at the closing table.

Money is always top of mind when selling a house. But, in focusing on the equity portion, people are often surprised to learn how much the cost to sell a house in the U.S is.

Costs of selling a home

Here’s are some of the typical costs home sellers can expect:

Real estate commissions

If you hire a real estate agent, their commission is likely to be the largest expense you incur. Typically, a listing agent’s fee ranges from 2.5% to 3% of the home’s sale price. For instance, on a $400,000 sale, you might pay your agent around $12,000 in commission. However, you might have the opportunity to negotiate a lower commission rate, particularly if the sale price is substantial.

Seller’s closing costs

In a real estate transaction, while many closing costs are typically the buyer’s responsibility, sellers also have their share of expenses. Common closing costs for sellers include title insurance, recording and settlement fees, and prorated property taxes up to the closing date. You may also incur costs for escrow services and wire transfers. If you’ve hired a real estate attorney, their legal fees will be due at closing. Additionally, in some cases, you might be asked to cover part of the buyer’s costs, especially as market conditions evolve and buyers gain more negotiating power. While you are not obligated to agree to these terms, it is a normal aspect of the negotiation process.

Mortgage payoff

Your existing mortgage doesn’t automatically vanish when you transfer ownership of the property; you must settle any remaining balance before the transfer can take place. This means you’ll likely need to include prorated accrued interest in the total amount due, and there may be an extra charge if your mortgage includes a prepayment penalty.

Moving costs

When you sell your home, you’ll need to relocate all your belongings to your new place. Hiring professional movers typically costs between $878 and $2,555, with the average price around $1,699, according to HomeAdvisor. Keep in mind, however, that this cost can increase significantly for long-distance moves.

Taxes

Here are three common tax considerations to keep in mind:

Property Taxes: Property taxes are often paid in advance, so you might need to settle the prorated portion of property taxes up to the closing date, with the amount held in escrow. If you’ve already paid property taxes beyond the closing date, you could be eligible for a partial refund.

Transfer Taxes: Many states impose a real estate transfer tax, which is a tax on the transfer of property ownership. The rate varies by location but is typically a small percentage of the sale price (usually less than 1 percent).

Capital Gains Taxes: If you realize a significant profit from selling your home, you may incur federal capital gains tax. This tax depends on the profit amount, whether you file individually or jointly with a spouse, how long you’ve lived in the home, and whether it was your primary residence. For instance, if you purchased the home 35 years ago for $200,000 and it’s now valued at over $1 million, you could face a substantial tax liability.

Optional Costs When Selling a Home

While certain costs, such as taxes, are unavoidable, others are optional. Here are some potential enhancements you might consider to boost your home’s appeal before listing it, each of which will involve additional expenses.

Home repairs and improvements

Before selling, you might consider a renovation project with the goal of increasing your home’s value. It’s a good idea to consult your real estate agent first to determine if the investment will be worthwhile.

Home inspection

In addition to discussing with your agent, it’s also prudent to consult a professional home inspector. A pre-listing inspection, which typically costs a few hundred dollars, can uncover any major issues before potential buyers do. For instance, if the inspector identifies a leak in your bathroom, you can address the issue beforehand, reducing the risk of a buyer requesting a price reduction for repairs.

Lowering the Costs of Selling a Home

If you’re looking to reduce the costs of selling your house, consider these options:

Sell it as-is: By listing your home as-is, you indicate to buyers that no repairs or concessions will be made. This approach avoids the expense of fixing issues like cracked floorboards or a damaged garage door, but it might deter some buyers who prefer properties in better condition.

Sell it yourself: Going the “for sale by owner” route eliminates the commission fee for a listing agent, saving you up to 3 percent. However, you may still need to cover the buyer’s agent’s fee and be prepared for the extensive work involved.

Sell with a discount service: Opt for low-commission or flat-fee agents to reduce your selling costs. Keep in mind the saying “you get what you pay for”—ensure you research whether your listing will receive adequate attention and priority.

Sell to a cash homebuyer: These companies offer a fast, straightforward sale, often purchasing homes in as-is condition without requiring repairs or staging. While this method provides a quick cash sale, you may not achieve as high a price as you would through a traditional market sale.

Bottom Line

There are too many variables to accurately estimate the total cost of selling a house, but you should still try to estimate the total cost so you can be better prepared.

If you’re looking to lower the costs of selling your home, reach out to Illinois Real Estate Buyers. We buy houses with cash, and we can make you a quick cash offer to buy yours today. Send us a message today to get a no obligation cash offer on your property.