Hey friends! If you’re thinking about selling your home, one of the first questions you’ll likely have is, “How much will it cost me to close the deal?” Understanding the expenses involved is crucial for planning your next move, whether it’s buying another home or investing elsewhere. Let’s break down the costs and see how you can manage them effectively.
Typical Costs of Selling a House
When you sell a house, you can expect to spend about 10% to 15% of the home price on various selling costs. Some expenses are mandatory, while others are optional but can help speed up the sale.
Real Estate Agent Commissions
The biggest expense you’ll encounter is the real estate agent’s commission. Typically, this ranges from 5% to 6% of the home purchase price and is split between the listing agent and the buyer’s agent. With the recent NAR settlement, things are changing. As of April 2024, sellers are no longer required to offer a commission to the buyer’s agent. This shift could save you a significant amount of money and make the process more transparent.
My New 3% Listing Fee
Looking for a way to save even more? I now offer a 3% listing fee, a game-changer for those looking to keep more money in their pockets when selling their home. This reduced commission rate means you get full-service real estate expertise without the hefty price tag. Want to learn more about how this works? Check out the details here.
For a deeper dive into how commissions and the NAR settlement affect your sale, read our latest article.
Understanding the NAR Settlement
The NAR settlement has brought significant changes to the way real estate commissions are handled. Historically, sellers were required to offer a commission to the buyer’s agent, leading to higher costs and less transparency. This practice was challenged in a class-action lawsuit, resulting in a landmark settlement in April 2024.
The settlement aims to create a more competitive and transparent market by eliminating the requirement for sellers to pay the buyer’s agent commission. This change is expected to lower overall transaction costs and benefit both buyers and sellers.
For a more in-depth understanding of how the NAR settlement affects home buying and selling, check out our latest article on it.
Taxes and Neighborhood Fees
- Property Taxes: You’ll owe a prorated share of property taxes when you sell your home. This could be close to zero if you’ve recently paid, or several thousand dollars if the due date is near.
- Real Estate Transfer Tax: Some states or local jurisdictions charge a transfer tax when the property changes ownership. The amount depends on your location and the property value, and it could be paid by the buyer, seller, or both.
- Capital Gains Taxes: If your profit from selling the home exceeds $250,000 ($500,000 for married couples), you might face capital gains taxes.
- HOA Fees: If your neighborhood has a homeowners association, expect to pay prorated membership fees and possibly an HOA transfer fee.
Title Insurance for the Buyer
Title insurance protects the buyer in case there’s an issue with the home’s ownership history. In some areas, the seller pays for this policy, which averages around $1,000.
Your Current Mortgage Payoff
You’ll need to pay off your mortgage when you sell your home. The payoff amount includes any interest charges up to the closing date and any prepayment penalties.
Home Repairs
The buyer will likely order a home inspection before closing. If issues are found, you might be asked to cover repair costs.
Moving Costs
Whether you do it yourself or hire a company, moving costs can add up. Budget for packing materials, transportation, and any professional movers you might need.
Optional Costs to Sell a House
Depending on the competitiveness of your local market, paying for additional services can attract more potential buyers:
- Home Warranty: Offering a home warranty can ease buyers’ concerns about future repairs. Coverage typically costs a few hundred to a thousand dollars.
- Home Staging: Professional staging can make your home more appealing. The median cost for staging is around $1,500.
- Buyer’s Closing Costs: In a slow market, offering to pay some of the buyer’s closing costs can help seal the deal.
How to Save Money When Selling a House
Here are some tips to keep costs down:
- Shop Around for Agents: Compare services and negotiate fees.
- Sell Without an Agent: You can avoid commission fees by selling on your own, though you might still pay for the buyer’s agent.
- DIY Home Projects: Tackle some home improvements yourself to save on professional fees.
The Bottom Line
Selling a house comes with various costs, typically adding up to about 10% of the sale price. By understanding and planning for these expenses, you can better manage your budget and maximize your profit from the sale.
Ready to sell your home? Contact me today for expert guidance and to take advantage of my Total Listing Agent services at the new 3% listing fee!
