Home sales were especially good in 2020 with just over 5.6 million home sales and continue doing well in 2021. In fact, they’re doing so well that many people are likely considering selling their homes to cash in on the nationwide seller’s market. It’s not a bad plan, but it may not turn out quite as profitably as you expect.
Selling a home comes with a host of fees and costs that eat away at your profit margin. So, how much does it cost to sell a house? Keep reading for a breakdown of some of the most common costs.
Real Estate Commission
With the exception of paying off your mortgage, the single biggest hit that you’ll take comes in the form of real estate commissions. As a general rule, the seller pays the commission which usually works out to somewhere in the 5 percent to 6 percent range.
In the last few years, though, a small contingent of flat fee real estate brokers have appeared on the market. That does offer you an option to keep those fees down.
Most homes need at least a few repairs before they go on the market. Depending on the nature of the repairs, this can cost quite a bit. For example, if your roof is near the end of its life, replacing that will cost around $8000 on average before the house goes on the market.
You’re responsible for any property taxes up until the day the sale closes. It’s likely that you’ll need to pay transfer taxes. Depending on the value of your home and your filing status, you may also find yourself liable for capital gains taxes.
Other Home Selling Fees and Costs
There are a number of other home selling fees and associated costs that can include title insurance, homeowners association fees, attorney fees, and recording fees. Plus, you may also pay for staging and landscaping.
Don’t forget about your moving costs. While not technically part of the cost of selling a home, moving costs crop up specifically because of selling a house.
How Much Does It Cost to Sell a House?
The reality is that there is no average cost to sell a home. The specific value of your home, taxes, repairs, and staging all contribute to your overall costs. If you want to err on the side of caution, assume that your costs will work out to about 10 percent of the selling price.
You and the Cost of Selling a Home
When real estate turns into a seller’s market, there is a temptation to sell your home. You should give some consideration to the question of how much does it cost to sell a house. Once you add up all the potential fees and costs or just calculate 10 percent of the potential selling price, will you still make a reasonable profit?
If yes, then selling might well be the right choice for you. If not, waiting might prove the wiser choice.
Looking for more real estate tips? Check out the posts in our Mortgage and Wealth sections.