Understanding the True Costs of Selling Your Home

Understanding the True Costs of Selling Your Home

When most homeowners think about selling, they focus on the listing price and what they hope to walk away with after the sale. But the reality is, selling a home comes with its own set of expenses—typically ranging from 10% to 15% of the sale price. Knowing these costs upfront can help you set realistic expectations, budget wisely, and avoid surprises at the closing table.

The Biggest Costs of Selling a Home

1. Real Estate Commissions (Always Negotiable)

For most sellers, the largest expense is the real estate agent’s commission, which can be negotiable. These fees can be up to 6% of the sales price, a flat fee, a variable rate fee or whatever you negotiate with your real estate agent. This fee can even be split between the buyer’s agent and the seller’s agent. While it’s an investment, a skilled agent often helps you price your home competitively, market it effectively, and negotiate the best deal—ultimately saving you time and stress.

2. Closing Costs (1–3%)

On top of commissions, sellers will also have some closing costs, which might include:

• Transfer taxes (required by many states or municipalities)

• Title search and insurance fees

• Attorney fees (if applicable)

• Prorated property taxes or HOA dues

Together, these fees typically add up to 1–3% of your home’s sales price.

3. Home Repairs & Staging

Buyers want move-in ready homes, which means sellers often need to invest in repairs, touch-ups, or upgrades before listing. This might include fixing leaky faucets, repainting, updating lighting, or even replacing worn carpet. On top of that, many sellers opt for professional staging to highlight the home’s best features—an investment that can pay off with faster sales and higher offers.

4. Mortgage Payoff & Prepayment Penalties

If you still have a mortgage, the balance will be deducted from the sale proceeds. Some loans also carry prepayment penalties, so it’s important to review your mortgage terms. Don’t forget to factor in accrued interest up to the day of closing.

Other Possible Costs to Consider

Beyond the major expenses, sellers may encounter:

• Moving costs (whether DIY or hiring movers)

• Utilities kept on until closing

• Home warranties offered to buyers as an incentive

• Concessions (such as covering some of the buyer’s closing costs to sweeten the deal)

Calculating Your Net Profit

Here’s a simple example:

• Home Sales Price: $300,000

• Real Estate Commissions (6%): $18,000

• Closing Costs (2%): $6,000

• Repairs & Staging: $3,000

• Remaining Mortgage Balance: $200,000

Net Proceeds = $300,000 – $18,000 – $6,000 – $3,000 – $200,000 = $73,000

This is your true profit, and it’s what you’ll walk away with after the sale.

Final Thoughts

Selling a home is about more than just setting a price and waiting for offers. By understanding the true costs—commissions, closing expenses, repairs, and mortgage payoff—you can plan and avoid disappointment. A trusted real estate professional can walk you through these numbers, help you maximize your home’s value, and ensure you walk away with the best possible outcome.