How Much Does It Cost to Sell a House?

The Cost of Selling a House

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Several costs are incurred when selling real estate, and they can add up to as much as 10% of the sale price overall.

Buyer's agents generally include any costs they want the seller to pay in the purchase contract, so sellers are forewarned. But they should clarify with their own agents which fees are customary and which are not. You won't pay for the new buyer's insurance, title registration, or taxes if you sell your car, but selling a home is different.

Contributing Factors

How much it costs to sell a house can depend on local custom, government requirements, and the current real estate market. Is it a buyer's market, a seller's market, or a fairly balanced marketplace?

The costs of sale in the purchase contract are negotiable, but it might turn a buyer away if most sellers in your town are willing to pay for transfer taxes and you don't want to.

Other factors are more personal and unique to your own situation, such as the condition of your home and how desperate you are to sell.

Preparing the Home

Yes, your agent can stick a for-sale sign on your lawn and you're open for business. But you don't want to be in the business of selling your home—you want it sold, and this can require a cash investment.

You'll want to take care of minor repairs and cosmetic issues before you list, at the very least. And you might want to address more serious problems now as well if you suspect that an eventual home inspection is going to reveal plumbing or roofing issues.

You'll probably have to pay for any home inspection repairs anyway one way or another, whether it's coming down on purchase price or offering a credit to the buyer.

"Staging" your home so it looks its absolute best for showings can cost an average of about $1,200 as of 2018.

Real Estate Commissions

The most significant fee you'll pay will probably be the real estate commission, anywhere from 5% to 6% of the sale price, although 6% is common. Half typically goes to the seller's agent and half goes to the buyer's agent.

This is where some homeowners will try to scrimp and consider selling the property themselves, but that might not work out well. The National Association of Realtors routinely conducts surveys that show that sellers earn about 20% more by hiring an agent over selling a home by owner.

Agents are sometimes willing to negotiate their commissions, such as when the market is particularly strong or the sales price is significant.

Transfer Taxes

Documentary transfer taxes can add up to a bit of money, but they're not universal. Twelve states don't charge them as of 2018, and they can vary a bit among the states that do.

The tax is usually a percentage of the sale price. For example, it's calculated at 55 cents per $500 of the sales price in California. That would work out to $330 for a $300,000 home.

It might not seem like a lot, but little things like this can add up for a buyer. Although the buyer is normally responsible for the tax, it's often paid for by the seller as a courtesy because the buyer has already paid a lot of the closing costs to obtain a loan.

Other Customary Fees

Buyers are normally responsible for paying other closing costs as well. Overall, these fees can run from 2% to 4% of the sale price, but sellers often make "concessions" and agree to pay for some of them to ensure that the transaction goes through.

Fannie Mae allows for concessions of up to 9% of the sale price, depending on the buyer's down payment.

These costs can include:

  • City transfer taxes
  • Delivery or courier costs
  • Document preparation
  • Escrow fees
  • HOA fees
  • Home warranties
  • Loan tie-ins
  • Loan payoffs and beneficiary demands
  • Property taxes
  • Recording fees
  • Title insurance for the owner's policy
  • Pest inspections and pest completions
  • Wire fees
  • Attorney fees

A title insurance policy can cost up to $4,000 or so. Escrow fees can reach $2,000. As for attorney fees, many states require that you must have a lawyer to close on a real estate transaction, including New York, Florida, Massachusetts, Pennsylvania, and the District of Columbia.

Government-Mandated Costs to Sell a House

A seller is required to provide a good many home disclosures, but there can be some gray areas here.

For example, the California Civil Code doesn't state that a seller must pay for a Natural Hazard Disclosure, but it does require a seller to disclose natural hazards to the buyer. The best way to satisfy this particular requirement is to buy a natural hazard disclosure for $100 to $200 or so.

Types of government-mandated costs to sell a house will vary from state to state, from county to county, and from city to city. Ask your local real estate agent about these potential fees.

Some cities require that sellers pay for and submit to buyers a city inspection report. Sellers might be required to install safety devices such as smoke alarms or carbon monoxide detectors, or even water diversion devices that prevent backups at a garden hose.

The Bearing of Markets on Costs

You might be able to demand that a buyer pick up more of the closing costs in a seller's market simply because you have multiple offers on your home.

Buyers in a seller's market who offer to pay more of the sellers' costs can make their offers more attractive. The opposite is true in a buyer's market. A seller might offer to pay some of the buyer's closing costs to make a home more attractive.

Always ask your agent to give you an estimated net sheet based on that particular offer when it comes time to review a purchase offer.