How Much Does It Cost to Sell a House?

Basic Costs of Selling a Home

As the saying goes, it takes money to make money. If your home's value has increased, you may stand to profit substantially when you sell. But you'll also have to pay some expenses to close the deal.

Example: If the average cost to sell your $400,000 home falls in the 10% to 15% range, expect to pay between $40,000 and $60,000 in total costs.

Breaking it down, here's a summary of some of the most common expenses when you sell your house, followed by more detailed explanations.

• Agent commissions: 5% to 6%
• Closing costs: 1% to 3%
• Existing mortgage payoff: Varies
• Taxes: Varies
• Buyer's title insurance: Varies
• Moving costs: Varies

Agent Commissions: 5% to 6%

The real estate agent's commission to sell a home typically runs around 5% to 6% of the sales price. You should expect to cover the listing agent's commission, which is often around 2.5% to 3% of the home's sale price. The listing agent lists the home on the multiple listing service (MLS), arranges showings and negotiates offers.

Historically speaking, the seller usually pays the commission to their listing agent, who then splits it with the buyer's agent—hence the 5% to 6% sum total. That said, be sure to discuss the norms in your region with your listing agent. It's no longer necessarily the case that the seller always covers the buyer's agent commission. In some markets, it may still be customary, while in other areas, you may be able to negotiate so that the buyer pays some of the commission.

Example: A 6% commission on a $400,000 house is $24,000, which the listing agent and buyer's agent might split down the middle. That's a steep cost to sell your house, but it's likely worth it. According to the National Association of Realtors (NAR), homeowners who use a real estate agent to sell their homes typically sell for $55,000 more than those who sell their homes without an agent.

Learn more: Who Pays Real Estate Agent Commission Fees?

Closing Costs: 1% to 3%

On top of real estate commissions, sellers must also pay closing costs, which could include transfer taxes, title search, escrow fees and any fees you agree to pay for the buyer. Closing costs for buyers can be between 3% and 6%, while sellers usually pay 1% to 3% of the sales price. However, closing costs often include items that are typically the buyer's responsibility, which sellers may agree to pay to sweeten the deal for buyers.

Learn more: What Are Closing Costs for a Home Seller?

Your Mortgage Payoff: Varies

Unless you own your home outright, you'll need to pay off your mortgage with proceeds from the home sale. Remember, your lender holds a lien against your home until you zero out the mortgage balance.

You may also owe prorated interest as well as a prepayment penalty if your lender charges one. Lenders rarely charge prepayment penalties anymore, but you may have one if you have an older mortgage. Contact your mortgage lender to confirm your total payoff amount and avoid any surprises at closing.

Taxes: Varies

When you sell your home, you may need to pay various types of taxes, such as:

• Capital gains taxes: You may need to pay capital gains taxes if your home is worth more than when you bought it, but certain tax rules apply. If you bought your home for $300,000 and it is now worth $400,000, your capital gains are $100,000. You may qualify for a capital gains exclusion, in which case you don't have to pay capital gains tax on the first $250,000 of profit if you're a single tax filer or $500,000 if you're married filing jointly—as long as you're selling your primary residence.
• Property taxes: You must make sure your property taxes are paid up until the final closing date. Generally, you'll be responsible for covering taxes until the ownership transfers to the buyers, who will then take over paying the property taxes.
• Transfer taxes: Some local governments charge a fee when you transfer your property to a buyer. Transfer taxes are often negotiated between the buyer and seller to determine who will cover the cost.

Buyer's Title Insurance: Varies

Lenders often require buyers to purchase title insurance to cover the transfer of the title from the seller to the buyer. The insurance protects the buyer—and their lender—from potential ownership disputes, liens or other issues that could arise. During negotiations, you may agree to cover this expense for the buyers. Title insurance costs vary by state but usually cost about $1,000.

Moving: Varies

Of course, you'll need to move your belongings to your new home. The cost of your move could depend on a multitude of factors, including whether you're moving across town or across the country. The size of your home is also important, as moving from a small apartment will cost less than moving from a large house. According to Moving.com, the cost to move roughly 7,500 pounds of items from a two- or three-bedroom home averages $1,250 for a local move and $4,890 for a long-distance move.

Learn more: How to Avoid Unexpected Moving Costs

Additional Costs of Selling a Home

On top of these basic costs to sell a house, there are several additional expenses that you must consider.

Pre-Listing Home Inspection

Getting your home inspected before listing it for sale could help you confirm that all the major systems and features, such as the HVAC, electrical and roof, are working properly. Typically, this inspection costs between $300 and $425, which could be worth it if it helps you find and address any home repairs that might otherwise jeopardize a deal.

Home Repairs

When it comes to selling your home, some home repairs are more important than others. Generally, you want to make sure all essential aspects of your home are in good working order. It's also wise to identify high-ROI repairs that can boost your home's value for a fraction of the cost.

Consider replacing broken fixtures or lighting, fixing leaky faucets, repairing or replacing broken doors, making sure the HVAC is in good working order and doing any other repairs that will help boost your home's value. Even decluttering and deep cleaning your home's interior can create a more desirable space.

Learn more: Should You Fix Up Your House or Sell It As Is?

Home Staging and Preparation

Home staging is an optional expense you may want to consider. A professional home stager can arrange your furniture, decor and other features to make it more appealing to buyers. If your home is vacant, they can fill it with luxury furniture and, ideally, help buyers envision themselves living in the space.

Home staging costs vary, but NAR reports the average cost ranges from $300 to $600 for an initial consultation and $500 to $600 monthly for each staged room. That's a tidy sum, to be sure, but it could pay off if it helps your home sell more quickly.

Additionally, improving your home's curb appeal could add substantial value to your home without breaking the bank. A HomeLight survey reveals that buyers will pay 7% more on average for a house with exceptional curb appeal compared to another one with an uninviting appearance. You can improve curb appeal quickly and inexpensively with minor improvements, like trimming bushes and trees and sprinkling flowers around the yard.

Learn more: Ways to Increase Your Home Value

Seller Concessions

In a buyer's market, you might offer to pay some of the buyer's closing costs. Offering such seller concessions can help get a deal across the finish line, since it reduces the upfront expenses for the buyers. You can also deduct seller concessions as sales expenses on your income taxes. Depending on the details of the deal, you may cover certain common seller concessions such as fees for the appraisal, inspection, title search or real estate taxes.

How to Save Money When Selling a House

Selling your home comes with some inherent expenses. However, you may be able to reduce costs and maximize your profit by following smart strategies, such as:

• Listing during a seller's market: Trying to time the market may be a futile exercise since no one can predict with certainty what the housing market will do. Still, if you're in a seller's market and you're considering selling, listing your home now could offer some substantial benefits. Besides pricing your home higher, you may be able to leverage the home supply shortage to ask for reduced commissions and lower closing costs.
• Negotiating with a proven real estate agent: Commissions and fees vary from one agent to another, so it's a good idea to interview at least a few experienced agents to see which one offers the best balance of cost and experience.
• Negotiating a lower commission: While you're interviewing real estate professionals, don't be afraid to negotiate the sales commission, especially in a seller's market. If an agent believes your home will sell quickly, they may agree to a lower commission, which could save you thousands of dollars.
• Selling the home yourself: The largest cost of selling your home is typically the agent commissions, so you may be tempted to sell your home without one. Listing your home as for sale by owner (FSBO) or using a flat-fee MLS service are two ways you can DIY the sale of your home. FSBOs often take longer to sell, in part because agents will direct buyers to their own listings. If you choose to follow this route, make sure you market your home aggressively on popular real estate platforms online.

Learn more: Tips to Sell Your Home Faster

Frequently Asked Questions

The Bottom Line

The most costly expense when selling your house is usually the agent commission, but don't be afraid to negotiate for a lower rate. If you work with a real estate agent to sell your home, choose one with extensive experience negotiating on behalf of sellers. You may be able to pay less for closing costs, seller concessions and other fees, especially in a seller's market.

If you're looking for a new mortgage for your next home, make sure your credit is in good shape by checking your credit report and FICO^® Score^Θ for free with Experian. If you spot any issues, take steps to resolve them to secure the most favorable rate and terms.