If you’re planning to sell your house, you’re likely focused on the potential profit. However, there are costs of selling a house, meaning you won’t retain all the sale proceeds, as various expenses, including taxes and closing costs, will be deducted.

So, what are the costs of selling a house? The total expenses depend on factors such as the home’s sale price, your location, and your negotiation with the buyer. Common costs include real estate agent fees, attorney fees, title-related fees, taxes, and other administrative expenses. If you have an outstanding mortgage, your lender may also charge additional fees. Understanding these costs in advance can help you avoid unexpected surprises at closing.

Here are some costs you should take note of

Real Estate Commissions

When selling a house, one of the major expenses you’ll encounter is the commission fee, which is a percentage of your earnings paid to the real estate agents who facilitate the sale.

Typically, the standard commission is around 6% of the sale price, split between the seller’s and buyer’s agents. For instance, if you sell a house for $300,000, the total commission would be $18,000, with $9,000 going to each agent.

While this might seem substantial, the value of hiring a real estate agent is significant. Agents bring extensive expertise and can help set realistic expectations, providing you with confidence throughout the selling process. They offer valuable advice on preparing your home for buyers and implement effective marketing strategies to ensure a timely sale. Additionally, their negotiation skills can maximize your sale price.

The benefits of working with an agent are evident in the results. In 2019, homes sold with the assistance of an agent had a median sale price of $345,000—$120,000 more than those sold without an agent.

Improvements and Repairs

 In 2022, 71% of sellers made at least one improvement to their home before listing it, and you might find it beneficial or necessary to do the same. Common improvement projects include landscaping, updating bathrooms and kitchens, replacing carpets or flooring, painting the exterior, and redecorating.

Additionally, a home inspector might identify needed repairs, which can be expensive—major repairs average around $13,234. If your home is newly built, you likely won’t have to worry about these costs.

Remaining Mortgage Balance

 If you have a mortgage on your home, one of your closing costs will be the remaining loan balance, which should be covered by the proceeds from the sale.

For example, if after 10 years you have a remaining mortgage balance of $80,000 and you sell your home for $300,000, you would use $45,000 of the sale proceeds for selling expenses and $80,000 to pay off the mortgage. This leaves you with $175,000—a substantial amount that could serve as a down payment for your next home!

However, if you’re underwater on your mortgage, meaning the remaining loan balance exceeds your home’s current value, it may not be the best time to sell. Selling in this situation would leave you short of covering both the mortgage payoff and the selling costs.

In such cases, it’s wise to continue paying down your mortgage and wait until your home’s value increases enough to cover the mortgage balance and selling expenses, allowing you to benefit more from the sale.

What is the cost of home staging?

While tidying up and painting might have sufficed 30 years ago, today’s market often demands more. In addition to painting, sellers frequently move out most of their furniture and even rent art. The cost of staging can vary widely, ranging from a few hundred to several thousand dollars, depending on the extent of the work required. You might be able to save money by staging the home yourself, but be prepared for potential costs like storage space. Some real estate agents include staging as part of their services.

Home staging doesn’t have to be overly elaborate, especially if you need to access your home office during the process.

Sometimes, a few simple touches can make your home market-ready. At a minimum, you should:

Declutter and clean to make spaces feel larger and brighter

Remove personal items like family photos

Ensure a pleasant smell, perhaps by baking cookies before showings or using room fresheners.

How can I lower the costs associated with selling my house?

Charge up those power tools and don your safety goggles because one of the best ways to cut down on home-selling costs is to tackle home improvement projects yourself. If you’re skilled in areas like landscaping, carpentry, or painting, you could significantly reduce your repair and staging expenses.

You can also save on moving costs by decluttering and selling items you won’t need right away. Fewer belongings mean lower moving expenses. To cut costs further, ask department stores for free packing boxes and enlist friends to help with the move instead of hiring a moving company. Just make sure to reward their help with some extra-large pizzas!

If you’re moving for a job, consider negotiating a relocation package with your employer. Many companies offer bonuses to cover moving expenses, and such packages are quite common—almost 64% of employees received some form of relocation reimbursement in 2022.

How much are Closing Costs

In addition to agent commissions, there are several other miscellaneous closing costs you should budget for. These can include prorated property taxes for the year, any outstanding HOA fees, lender’s title insurance, title transfer fees, attorney costs, and various government fees, which may vary depending on your location.

How much does it cost to move?

The cost of moving will vary based on your destination and the volume of belongings you need to relocate. Typically, you should budget for at least a few hundred dollars in moving expenses. Of course, if you have access to a truck and a group of friends willing to help for pizza and beer, you might save on costs. However, hiring a professional, insured moving company can provide you with the assurance that your possessions are handled with care.

Do you need a No Obligation cash offer?

Illinois Real Estate Buyers specializes in purchasing homes for cash, and we can provide you with a fast cash offer today. We aim to help you sell your home in Chicago quickly—often within a week—and on your preferred timeline. We’ll give you a fair, no-obligation offer, and you can count on us to follow through with a swift purchase of your property. Before committing to a real estate agent, consider reviewing our cash offer. If you’ve already received other offers, we are confident we can offer you more. Whether you’re selling a house, duplex, mobile home, or commercial property in Chicago or nearby areas, we’re here to assist you with a cash sale.