From Listing to Closing: Unpacking the Costs of Selling a House

Selling a house involves various costs that can significantly impact the net proceeds. Here’s a comprehensive list of potential expenses with a brief explanation for each, along with estimated costs:

1. Real Estate Agent Commission

• Cost: 5% – 6% of the sale price

• Who Pays It: Negotiable, Seller or Buyer or Both

• Explanation: This is typically the largest cost, paid to the real estate agent or broker who facilitates the sale. It is usually split between the buyer’s and seller’s agents.

2. Home Repairs and Upgrades

• Cost: Varies widely; typically 1% – 3% of the home’s value

• Who Pays It: Seller

• Explanation: To make the home more appealing, sellers may need to make repairs or upgrades, such as fixing structural issues, painting, or updating fixtures.

3. Staging Costs

• Cost: $500 – $2,000

• Who Pays It: Seller or Real Estate Agent

• Explanation: Staging involves arranging furniture and decor to make the home more attractive to potential buyers. It can also include professional photography.

4. Closing Costs

• Cost: 1% – 3% of the sale price

• Who Pays It: Negotiable, Seller or Buyer or Both

• Explanation: These are various fees associated with finalizing the sale, including title insurance, attorney fees, and escrow fees. Some costs are negotiable and can be shared with the buyer.

5. Pre-Sale Inspections

• Cost: $300 – $500

• Who Pays It: Negotiable, Seller

• Explanation: Sellers may opt for a pre-sale inspection to identify any issues that could arise during the buyer’s inspection. This can help in pricing the home accurately and avoiding surprises.

6. Concessions to Buyer

• Cost: Varies

• Who Pays It: Negotiable, Seller or Buyer or Both

• Explanation: Sellers might offer concessions, such as paying for some of the buyer’s closing costs or offering a home warranty, to incentivize the sale. This amount can vary depending on market conditions.

7. Transfer Taxes

• Cost: 0.1% – 2% of the sale price (varies by location)

• Who Pays It: Seller

• Explanation: These taxes are imposed by local governments on the transfer of property ownership.

8. Mortgage Payoff

• Cost: Remaining loan balance

• Who Pays It: Seller

• Explanation: Any remaining balance on the mortgage must be paid off at closing. This isn’t an additional cost but rather an obligation from the sale proceeds.

9. Capital Gains Tax

• Cost: Varies (up to 20% federal, plus state taxes)

• Who Pays It: Seller

• Explanation: This tax applies if the property has appreciated significantly and does not qualify for an exclusion. It’s based on the profit from the sale.

10. Utilities and Maintenance

• Cost: Varies

• Who Pays It: Seller

• Explanation: Sellers may need to maintain the property and keep utilities active until the sale is finalized. This can include landscaping, heating, and cooling costs.

11. Marketing and Advertising

• Cost: $200 – $2,000

• Who Pays It: Real Estate Agent

• Explanation: These expenses include online listings, print advertisements, and open house events. Often, the real estate agent covers these costs, but they can be negotiated.

12. Legal Fees

• Cost: $500 – $1,500

• Who Pays It: The one who hires, and pays.

• Explanation: An attorney may be needed to review contracts and ensure all legal aspects of the sale are handled correctly.

13. Moving Costs

• Cost: $500 – $3,000

• Who Pays It: Seller

• Explanation: Costs associated with moving out of the home, including hiring movers or renting a moving truck.

Total Estimated Cost

• Low Estimate: Approximately 7% – 10% of the sale price (including agent commission and basic costs)

• High Estimate: Up to 15% or more, depending on additional expenses like repairs, upgrades, and taxes.

These costs can vary significantly based on factors such as location, market conditions, and the specific circumstances of the sale. It’s advisable to consult with real estate professionals and financial advisors to get a more accurate estimate tailored to your situation.

If you chose to sell your home FSBO – all of the below expenses will fall on to the Seller:

1. Pre-Sale Costs

These are costs associated with preparing the house for sale to maximize its market value.

• Home Inspection: $300 – $500
  
  

  • An inspection can help identify issues that need fixing before listing the house.
    
    

• Repairs and Renovations: $1,000 – $10,000+
  
  

  • Costs vary depending on the condition of the house and the extent of repairs needed.
    
    
• Staging: $500 – $3,000+
  
  
  • Professional staging can enhance the appeal of your home to potential buyers.
    
    

• Landscaping: $500 – $2,500
  
  

  • Improving the exterior can increase curb appeal.
    
    

• Professional Photography/Videography: $200 – $500
  
  

  • High-quality photos and videos can attract more buyers online.

2. Marketing and Listing Fees

Costs related to promoting and listing the property.

• Listing Fees: $100 – $500
  
  

  • For listing the property on Multiple Listing Services (MLS) or other platforms.
    
    

• Advertising: $500 – $2,000
  
  

  • Additional marketing efforts, such as online ads or print materials.

3. Legal and Closing Costs

Fees associated with the legal aspects of the sale and the closing process.

• Attorney Fees: $500 – $1,500
  
  

  • Legal services for reviewing contracts and handling closing details.
    
    

• Title Insurance: $1,000 – $3,000
  
  

  • Protects against potential title issues.
    
    

• Escrow Fees: $500 – $2,000
  
  

  • Fees for the escrow company’s services in managing the transaction.
    
    

• Transfer Taxes and Recording Fees: 0.5% – 2% of the sale price
  
  

  • Taxes and fees for transferring ownership. On a $300,000 home, this would be $1,500 – $6,000.
    
    

• Home Warranty: $300 – $600
  
  

  • Optional, but can provide buyers peace of mind and potentially speed up the sale.
    
    

• Mortgage Payoff: Variable
  
  

  • If you have an outstanding mortgage, this cost must be paid from the sale proceeds.

4. Miscellaneous Costs

Other potential expenses that may arise.

• Utilities and Maintenance During Sale: $200 – $1,000+
  
  

  • Costs to keep the home in good condition and utilities active while it’s on the market.
    
    

• Moving Costs: $500 – $2,500+
  
  

  • Costs for moving your belongings to a new location.

Approximate Total Cost

• Pre-Sale Costs: $2,500 – $16,500+

• Marketing and Listing Fees: $15,300 – $19,500+ (including agent commission)

• Legal and Closing Costs: $3,300 – $13,100+

• Miscellaneous Costs: $700 – $3,500+

• Estimated Total Cost Range: $21,800 – $52,600+

These figures are estimates and can vary widely depending on factors like the home’s location, condition, market conditions, and the level of professional services required. It’s crucial to plan for these costs and consult with real estate professionals for more accurate estimates tailored to your specific situation.