What is the cost of selling a house?

The costs of selling a house can add up. If you’ve never sold a home before, knowing what to anticipate can help lower some of your “seller stress.”

It helps to break down the process of selling your home into a few main phases where you might need to spend money — the preparation stage before the house goes on the market, the negotiation phase with potential buyers and the final stage where the deal is done and you’re preparing to close.

There’s no nationwide, standardized amount for the services and expenses associated with selling a house. Much depends on where you live, state law and other variables. But knowing these expenses are coming can be half the battle.

• What are common closing costs for a seller?
• What are seller concessions?
• How much is a real estate agent’s commission?
• Other closing costs to consider

What are common closing costs for a seller?

Even before your home is listed on the MLS, you’ll probably incur at least a few costs. Here are some you may face.

Presale inspections

Depending on where you live, a presale inspection may be required before you put your house up for sale. The presale inspection is something the seller must arrange, unlike an appraisal which is lender-initiated.

The presale inspection is also different from the buyer-initiated home inspection, which house hunters should use to get a realistic idea of the condition of the home.

Home inspections typically cost several hundred dollars.

Home repairs

If there are obvious broken items in your home that you think might detract some buyers, such as dings in the walls or a leaky faucet, fixing these ahead of listing your house may be a good idea.

That said, in a seller’s market, there may not be as much pressure to have the perfect presentation. More competition for a home may mean less scrutiny over minor imperfections.

Home cleaning

Aside from repairs, having your home professionally cleaned from top to bottom can also help you market your home better. You can expect to pay anywhere from $450 to $650 to deep clean a house up to 3,500 square feet, according to HomeAdvisor.

Home staging

Home staging is a strategy to help your home sell faster by depersonalizing and decluttering so potential buyers can more easily imagine themselves in the home. You may rearrange furniture or hang new art, for example.

It’s generally up to you to pay for any professional staging services to help make your home stand out to potential buyers. The median cost of staging is $1,500, according to a 2021 survey from the National Association of REALTORS®.

Cost-conscious sellers who stage the home themselves may be able to sidestep that expense, but there may still be costs associated with cleaning supplies, landscaping and tools or other items needed to get the job done.

What are seller concessions?

Once you’ve found a buyer, you’re not at the finish line yet. Depending on how any inspections, appraisals and buyer financing shakes out, your overall costs may change.

The person buying your home can ask you to help pay some of their closing costs — known as seller concessions.

But you’re limited in how much you can pay toward seller concessions. Depending on the financing that the buyers are using, you’re limited to the following amounts:

• VA loans: Up to 4% of your home’s sales price
• FHA loans: Up to 6% of your home’s sales price
• Conventional loans: Between 3% and 9% of your home’s sales price, depending on the down payment size.

What happens if you have an appraisal gap?

If your home appraisal comes in less than the sale price you’ve agreed to, the homebuyers may ask you to lower the price of the home to match the appraisal. According to data from CoreLogic, a real estate analytics company, appraisal gaps are more common when bidding wars happen, with 19% of home sales experiencing an appraisal gap during the red-hot market in May 2021.

How much is a real estate agent’s commission?

As the home seller, you should expect to pay the real estate agent’s commission fees, which together typically make up about 6% of the sales price of the house.

You’ll pay the agents during closing by subtracting their fees from the home sale proceeds.

Other closing costs to consider

Here are some additional costs you don’t want to forget about when selling your house.

Settling your bills

When you sell your home, you’ll need to settle your final bills. Don’t forget to ask about getting back any deposits you may have made to start certain services or utilities.

In the time leading up to closing day, it’s easy to overlook the need to return hardware such as satellite dishes, hardware supplied by your internet service provider and home security systems — but failing to do so can cost you.

Paying federal capital gains tax

If you sell your home for more than you bought it for, it’s also important to know that you may owe federal capital gains taxes as a result.

Under IRS rules, you may exclude a certain amount of appreciation as long as you’ve lived in the house for at least two out of the past five years. In 2022, the IRS listed these exclusions as up to $250,000 (if you’re a single filer) or $500,000 (if you’re filing jointly).

Transitioning to a new home

Finally, don’t forget to count the costs of moving to your new home as expenses related to selling your house. These expenses may include …

• Renting or buying your next home
• Moving to your new home (rental truck, moving crew, mileage)
• Setting up new utilities (gas, electric, internet)

Next steps

Most of the costs of selling a house are highly variable, so it’s a good idea to familiarize yourself with these costs in your housing market. You can also create a budget for selling your house the way homebuyers do when they prepare to buy a home, considering tax breaks and tax liabilities, as well as the other related costs. Doing so may take time but it’s likely well worth the effort.