10 Common Costs to Expect When Selling Your Home

Over the last year, countless American families sold their homes in urban areas and moved to the suburbs or to the country. Countless others took advantage of historically low interest rates and abandoned renting in favor of affordable monthly mortgage payments. This influx of interested buyers -- combined with a low supply of homes on the market -- resulted in fierce competition and thus a booming sellers market. As such, homes have sold nearly instantly at asking price or in weeks far above asking price. As Mike Maher writes in his article “Housing Market Outlook: It's A Seller’s Market, But Buyers Still Have Options” for Forbes, “the intense and prolonged sellers market has had a profound impact on Americans buying and selling homes this year.” According to Maher, “low mortgage rates continue to encourage new potential buyers to enter the market - despite the competition.” This has led to a far extended period of sellers’ advantage. In short, writes Maher, “if homeowners are thinking about selling their home, now is absolutely the time to do so.” Though homeowners stand to make quite a profit in the current market, sellers still face a number of expenses. From remodeling costs and home staging to closing costs and capital gains tax, sellers are responsible for at least a dozen costs. If you are wondering what would be my cost to sell a house, follow below to learn more about ten common costs to expect when selling your home.

How Much Does it Cost to Sell a House?

#1 Remodeling Costs

First on our list of costs to sell a house is remodeling or renovation. In a hot sellers market, homeowners might be reluctant to update their houses before listing. While some homeowners will not benefit from conducting intensive renovations, others could bump the sale price of their homes significantly. In her June 2021 article “Why You Should (or Shouldn’t) Renovate Your Home Before Selling It” for The Wall Street Journal, Jordyn A. Friedman explains how to decide. Friedman writes that in general, homeowners will benefit from strategic renovations. This is because “many buyers today want a turnkey opportunity—a home in move-in condition.” As such, a home that has been updated could “compete better against others on the market, especially new construction.” An updated home also offers a better first impression, especially because “many buyers see your home first online.” According to Jennifer Kalish -- a NYC real estate agent quoted by Friedman --, buyers “will pay a premium for a product that’s move-in ready…[because] ‘this allows them to avoid the headaches involved in the renovation process.’”

What to Remodel and When

When deciding whether to update your home, Friedman recommends focusing on projects that offer predictable returns. For example, redoing a kitchen or bath “might be tempting [but] you probably won’t see a return on investment when you sell.” Projects that provide a great return on investment for sellers are “garage-door replacement,” kitchen remodels and updating the home’s landscaping. Homeowners should keep in mind that “some brokerages will front the cost of updates so you can get your home up to speed without any out-of-pocket expense.” As such, homeowners might wish to wait to remodel their homes until meeting with and choosing a brokerage. Homeowners considering a full remodel before selling should be prepared to pay between $20,000 to $100,000 according to HomeGuide.com’s latest data.

#2 Professional Cleaning

The next cost to sell a house in our list is professional cleaning. Cleanliness truly is next to godliness when selling a home. According to Christine Bartsch in her article “Deep Clean Like You Mean It: Your Exhaustive House Cleaning Checklist” for Homelight, “a less-than-clean home can cost you thousands off the sale price or completely turn away potential buyers.” According to a recent Homelight survey referenced by Bartsch, “a deep clean alone can add nearly $2,000 in resale value.” Given that deep clean costs for a 2,000 square foot home average between $300 and $500, thoroughly cleaning your home before listing makes perfect sense. In his article Market Ready for The New York Times, Tim Keogh elaborates. 

Quoting VP of Town Residential Ginger Brokaw, Keough writes that “getting your home as clean as possible ‘is absolutely something of the greatest importance.’” Brokaw notes that she has “‘seen the response of people walking into a home that hasn’t been cleaned, staged or prepared for showings, and one that has.’” According to Brokaw, the difference between their reactions is “‘night and day.’” Homeowners who have chosen to thoroughly clean their home should focus first on “washing the windows, cleaning the floors, polishing the furniture and vacuuming the rugs throughout your home.” However, entryways, kitchens and bathrooms should receive “special attention” above all else. but the entry hall, kitchen and bathroom deserve special attention.

#3 Home Staging

Though many homeowners choose not to stage their homes, home staging can increase the sale price of a home when done properly for the house itself and the neighborhood. In her article “How Much Does Home Staging Cost—and How Much Will You Gain?” for Realtor.com, Margaret Heidenry writes that “home staging can get you more money for your home sale.” Heidenry notes that on average, “staged homes sell 88% faster and for 20% more than non-staged homes.” Though staging can be expensive, leaving your vacant home on the market for weeks or months on end could cost more than the staging itself.

The Cost and Value of Home Staging

In her article “Is Professional Home Staging Worth The Cost?” for Investopedia, Marjorie A Cohen elaborates on Heidenry’s comments. Cohen writes that “some 82% of buyer's agents said home staging makes it easier for prospective buyers to visualize the property as a future home.” According to the RESA, staging your home not only increases the final sale value in many instances but also reduces the number of days a home sits on the market. Referencing an RESA survey, Cohen notes that “homes that had not been staged before listing sat on the market an average 143 days,” while staged homes “sold in 40 days” on average. The latest HomeAdvisor cost guide estimates sellers will pay between $631 and $2,308 to stage their homes.

#4 Inspections

Next on our list of costs associated with selling a house is inspections costs. In our recent post “Should Homeowners Conduct Repairs Before Listing?” we noted that homeowners are often best served by conducting pre-listing inspections. In her article “Doing This One Thing Before Putting Your Home on the Market Can Help Sell It Faster” for Realtor.com, Wendy Helfenbaum explains why having your home inspected before you list is worth your while. Helfenbaum writes that “most sellers don’t get their homes inspected before listing them, because the buyer usually orders an inspection during escrow.” However, “if you’re willing to invest the time and money, a thorough inspection before listing your property can make it easier to price your home, manage repairs, and even help sell it faster—and for more money.” 

Wendy Helfenbaum notes that paying for an inspection ahead of listing can alert you to issues “if you’ve neglected home maintenance” over the years. Plus, repairs and renovations made before a sale are actually tax deductible. Homeowners who fully understand the state of their home also “won’t have to scramble to fix things at the last minute” and will have better leverage to “minimize back-and-forth negotiation. In her article “How Much Does a Home Inspection Cost?” for Realtor.com, Lisa Kaplan Gordon writes that “a typical home inspection costs $300 to $500.”

#5 Repairs Related to Inspections

If an offer is placed on your home, buyers might place a contingency clause in the contract. This contingency might require the seller to cover costs of necessary repairs -- e.g. faulty electrical wiring, poor drainage, etc. According to OpenDoor.com’s post “Common Repair Items,” inspectors might note issues with major systems like the HVAC, roof or foundation of a home. Exterior elements like the garage, irrigation, pool, deck and fencing might also pose issues. In the interior, plumbing, electricity and pests could trigger repairs post-inspection.

Cost of Post-Inspection Repairs

In her 2019 article “What are the most common repairs that show up in home inspections?” for the Pennsylvania Association of Realtors website, Kelly Leighton offers an estimate. Leighton writes that “according to a recent report from Repair Pricer, the average home inspection report showed more than $11,000 in needed repairs.” Each repair cost an average of “just under $550.”

#6 Utilities While the House is on the Market

As many sellers know, empty homes have expenses. In her article “Expenses to Expect When Selling Your Home: Understand the costs of selling a home” for NOLO, attorney Ann O’Connell explains. O’Connell writes that those moving out of their home and into another before placing the prior home on the market should “expect to pay double utilities for a while.” Ann O’Connell notes that homeowners will want “to leave the lights and heat on in the house for sale, or program them to stay on during hours that potential buyers and their agents might be stopping by the place.” According to O’Connell, no buyer wants to “enter a cold, dark house and fumble around for the light switches.” To determine how much homeowners might spend on their vacant house while it is on the market, sellers should check their current utility bills and adjust accordingly.

#7 Real Estate Agent Commission

Homeowners should also expect to pay their realtor, real estate agent or brokerage a commission upon the sale of their house. The Redfin.com guide “How Real Estate Commission Works'' notes that the typical “real estate commission is 5%–6% of the home’s sale price.” In many areas around the country, “the buyer’s agent receives 2.5%–3% in commission and the seller’s agent receives 2.5%-3% in commission.” However, this amount “can vary by agent and location.”

#8 Sellers Closing Costs

In their article “Closing Costs” for Investopedia, James Chen and Marguerita Cheng write that “closing costs are the expenses, over and above the property's price, that buyers and sellers usually incur to complete a real estate transaction.” Common closing costs associated with a home sale include “fees related to the origination and underwriting of a mortgage, real estate commissions, taxes, insurance, and record filing.” According to Chen and Cheng, “closing costs must be disclosed by law to buyers and sellers and agreed upon before a real estate deal can be completed.” As such, there should be no surprises regarding how much a seller will pay in closing costs. 

In her article “Closing Costs for Sellers: Common Fees Associated With Selling Your Home” for Realtor.com, Michele Lerner outlines which costs sellers typically pay. Lerner notes that “transfer taxes, recording fees, and property taxes are key parts of a seller’s closing costs.” Sellers should also be prepared to “pay the buyer’s title insurance premium” and “attorney fees as part of closing costs.”

#9 Remainder of Your Mortgage

Many homeowners still owe money on their mortgages when they list their home on the MLS. In her article “Can You Sell Your Home If You’ve Still Got a Mortgage?” for Homelight, Kate Smith quotes Knoxville, Tennessee real estate agent Rebecca Carter, who typically sells luxury properties. According to Carter, “‘most sellers have a mortgage.’” Homeowners in this situation should figure out exactly how much they “still owe to make sure the sale of [their] current home pays off the remainder of [their] mortgage, plus all of [their] selling costs.” If this amount is not met, sellers could “be facing a shaky financial situation where [they] owe more than [their] home is worth at closing — a position that no homeowner wants to be in. Tara Mastroeni explains exactly what happens to an existing mortgage when the owner sells his or her house in an article for Forbes. 

Mastroeni writes that “if you’ve been paying down your mortgage over the years, you’ll have built up equity in your home, which you can cash in on when you sell.” When your home sells, money from the buyer first pays off “the remaining amount of your mortgage” and “any home equity loans or HELOCs you may have.” Then, the closing costs -- e.g. real estate agent commissions, taxes and HOA fees -- are paid. Leftover money “after those debts are paid in full...is paid out to you as a profit.” These leftover funds can then be used to “to finance the down payment on a new home or however you see fit.”

#10 Capital Gains Tax

One of the final costs of selling a house is the capital gains tax. Homeowners can use this calculator from SmartAsset to determine how much they will likely pay in capital gains tax after the sale of their home. For those unfamiliar with the term, capital gains taxes are paid on properties worth more than $250,000. In his article “Capital Gains Tax on Home Sales” for Investopedia, Chad Langager elaborates. Langager writes that “if you are single, you will pay no capital gains tax on the first $250,000 of profit (excess over cost basis)” and if you are married, you will “enjoy a $500,000 exemption.” These exemptions only apply to primary residences, however, and cannot be applied to holiday or vacation homes.