Fees and Costs Associated With Selling a House in 2023

Money is always top of mind when selling a house. But in focusing on the equity portion, people are often surprised to learn how much it costs to sell a house in the U.S.

“Depending on the price range of the home, I tell my clients that they need to be ready to spend 9%–10% of the sale price on selling costs, including the real estate agent commission and closing costs,” says Joanne McCoy, a top-selling real estate agent in Lincoln, Nebraska.

That doesn’t account for the money spent on preparing the home for listing or moving fees. To assist in tracking your total costs, we’ve put together a list of the common fees associated with selling a home, along with a description and the typical amount of each.

You can use this information to better estimate the amount you’ll actually pocket for reinvesting into your next home or creating your retirement nest egg.

Selling fee	Typical % of sale price
Real estate agent commission	5.8%
Staging and prep costs	1%-4%
Inspections and repairs	varies
Title, settlement, and taxes	1%-3%
Seller concessions	0%-6%

 

Start with a home value estimate

A quick online price estimate can be a helpful starting point to orient yourself in the process. Using recent sales records, market trends, and your home’s latest selling price, HomeLight’s Home Value Estimator provides a preliminary range of value for your property in under two minutes. Enter your address to get started. It’s fast, and it’s free.

Real estate agent commission (5.8%)

One of the first things you should do when you decide to sell your home is hire a top local agent. Research shows an agent’s expertise makes a big difference: In 2022, agent-assisted sellers sold their homes for a median of $345,000, compared to $225,000 for FSBO sellers.

If you work with a real estate agent, you’ll need to pay a commission for their assistance in pricing your home, marketing it to the masses, and negotiating with the other parties in order to get you the best possible price and terms, among other services.

According to HomeLight’s transaction data, the national average real estate agent commission is 5.8% of the property sales price. That commission covers the listing agent and buyer’s agent fees. (It’s customary for the seller to pay both.)

To access commission data specific to your area, consult HomeLight’s commission calculator and enter your city.

How is your commission divided between agents?

Your real estate agent’s commission is not only split between the buyer and seller agents but also their respective brokerages. Every agent has an agreement with the brokerages in which they hold their real estate license as to how their commission is split.

For example, say you sell your home for $300,000 with a 6% commission rate and each agent has a 60/40 split agreement with their brokerages. That puts your commission at 18,000. Here’s how that will break down:

• Seller’s agent:  $5,400 (60% of their $9,000 commission share)
• Seller’s broker: $3,600 (40% of their $9,000 commission share)
• Buyer’s agent: $5,400 (60% of their $9,000 commission share)
• Buyer’s broker: $3,600 (40% of their $9,000 commission share)

Staging and prep fees (1%-4%)

When it comes to selling your home, presentation matters. Now, that doesn’t mean you should drop everything to remodel entire rooms that aren’t perfectly modern. According to HomeLight’s Top Agent Insights survey for Spring 2023, you won’t recoup all of your renovation costs — 85% of your spend for a kitchen remodel and 98% for a bathroom remodel.

You may be better off doing light prep work and keeping your budget restrained. Here’s where you can focus your efforts and about how much you can expect to spend on each project:

Declutter ($400 for dumpster rental)

Research shows that decluttering your home prior to listing will pay off in huge rewards. In fact, a HomeLight survey of top agents shows an estimated price increase of $6,523 for decluttering. Clear those countertops, organize the kids’ toys, and remove items junking up your floors — it’s well worth the effort!

Buyers want to envision what your home will look like with their own furniture, and getting rid of unnecessary items and distractions will make your home more attractive.

Decluttering can be done for the cost of sweat equity, though some sellers may need to anticipate costs for junking and storage. Renting a dumpster costs $381 on average. Combine that with some trips to Goodwill and the recycling center to keep decluttering costs manageable.

If you need to rent a temporary storage unit, expect to pay an average of $180 per month. DIYers can follow HomeLight’s decluttering checklist for more guidance.

Deep clean ($300 per clean)

Deep cleaning your home before listing can result in an estimated price increase of $3,731.

A professional deep clean will cost you about $300 on average, but you could save that money and tackle the job yourself using HomeLight’s deep cleaning guide. Scrub the bathrooms and clean the kitchen until it sparkles. Don’t forget easy-to-miss cleaning spots like baseboards, ceiling fans, and window sills.

Apply a fresh coat of paint to interior walls ($2,000)

The safest bet for increasing your home’s appeal to prospective buyers remains bright but neutral colors. Even if you already have fairly neutral colors in your home, a new coat of paint can make a home look and feel fresher overall.

A recent HomeLight survey concludes that buyers prefer light and white color schemes in the kitchen, according to 84% of agents.

Expect professional painters to charge $2-$6 per square foot, or you can do the job yourself for $200-$300.

For more inspiration, you can visit HomeLight’s post on the top home paint colors to sell your house for a room-by-room guide.

Freshen up your flooring ($1,800)

If you have hardwood floors, and they’re in good shape, simply shine them up with some gentle floor cleaner. You can also opt to refinish them for an average cost of $1,831.

Install new hardwood floors for $4,720 or replace dingy carpets for $784-$2,809, depending on the size of the space and the carpet material. If your carpets are decent, rent a carpet cleaner for as little as $27 (for four hours) or pay a pro $75-$125 per room. If you’re selling a high-end home, buyers will likely come in and replace any carpet with hardwood, anyway.

Add curb appeal (average $3,500)

According to HomeLight’s 2022 Top Agent Insights report, buyers will pay 7% more for a home with great curb appeal than a home with a neglected exterior. HomeLight’s top agents estimate spending approximately $3,467 on curb appeal will yield around $11,718 in resale value, a 238% return on investment.

Make sure you mow the lawn, fertilize the grass, edge your walkways and flower beds, and pull up any weeds. HomeLight data shows that if you invest just $340 in basic yard care, you could gain an average of $2,173 in value. Install fresh mulch for another $1,749 boost.

Stage your home ($1,800)

New York real estate agent Rory Clark says there are two distinct advantages to staging your home. First, your property will sell much quicker. 48% of listing agents reported that staging a home decreases the time on market, according to the National Association of Realtors® (NAR).

Secondly, you’ll increase your resale value with a relatively easy solution. A professional staging service will cost you $1,773 on average (even less if your listing agent stages the home themselves). For that investment, 20% of agents reported an increase in resale value of 1%-5%. Another 14% of agents reported a 6% -10% increase.

“There is absolutely going to be an exponential return for a turnkey and staged property,” Clark says.

Adding up prep costs

A seller who completed all these tasks would spend around $9,800 preparing their home for sale, which amounts to around 2.6% of today’s median home sale price of $375,700. However, some sellers’ to-do lists may be shorter if their home is in great shape, or it could require a little more TLC to be marketable. Talk to a top real estate agent about what your house needs and what they recommend putting in for the best ROI. In the 2023 market, homes are selling fast, and less is probably more.

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Inspections and repairs (varies)

If you’ve sold a home before, you know the home inspection can be one of the more stressful parts of the transaction process. While the buyer is on the hook for most inspection fees, the inspection process can impact your bottom line.

Pre-listing inspection ($340)

Before your home even goes on the market, you may opt for a pre-listing inspection to identify potential issues or necessary repairs ahead of time. The process is the same as any standard inspection, except you conduct it before your home is listed and are responsible for the cost.

Unless you have a larger home, most home inspectors will charge a flat fee for the inspection, and, typically, you’ll have to pay somewhere between $281 and $402 on average.

Cost of repairs (varies)

Once you and the buyer both sign the purchase offer, the buyer may schedule their own home inspection to determine whether the home has any underlying issues that could impact its value or safety. You shouldn’t have to pay any fees for the inspection itself. However, the inspection does open the door for further negotiations before closing.

The buyer may make requests based on the findings laid out in the inspection report. According to a study by Porch.com, inspections save buyers $14,000 on average. However, how much buyers ask for and what you need to cover to keep the deal going will depend on your home’s condition and your negotiating position. With every request, you have essentially three options: make the repair before closing, negotiate which repairs to do, or push back and tell the buyer no.

Closing costs (1%-3%)

The act of transferring ownership of your home to someone costs money, and as the seller, you’ll be on the hook to pay some of these associated fees.

Title fees (0.5%-1%)

Title fees go toward covering insurance policies that offer protection to both the lender and buyer if a costly title issue crops up with a home after it’s purchased. A title search prior to closing is meant to surface problems, but instances of forgeries or filing errors do rarely crop up and create problems for an owner down the road.

Title fees are typically negotiable in a real estate transaction, though most commonly the seller covers the new owner’s title policy, while the buyer covers their lender’s policy. These policies together usually cost around 0.5% and 1% of the purchase price.

Settlement fees (1%)

The title company, escrow company, or attorney that orchestrates the closing will also charge what are called settlement or escrow fees for handling the final paperwork and distributing funds to the appropriate parties.

The settlement fees are generally divided between the buyer and seller depending on what the purpose of the specific settlement fee is and what is customary in the market where the property is located, but who pays these fees can be a matter for negotiation in many instances.

Transfer tax or excise tax (0.1%-3%)

Depending on where you live, you may need to pay a non-deductible transfer tax on the sale of your house to complete the transaction. The tax will be calculated based on the value of your property and may be imposed by your state, county, or city. The tax covers the costs of transferring the deed to new owners and is typically your responsibility as the seller to pay. However, several states don’t charge these fees at all. Refer to this table to see how your state handles transfer taxes.

Reconveyance fees (varies)

When your mortgage loan is paid off during the sale, you will receive a reconveyance deed releasing you from the debt. The mortgage company has to record the deed with the county, and there are fees associated with this.

Recording fees (varies)

Once your sale is finalized, the new deed and other paperwork, such as change of title and bill of sale, must be recorded with your county. Typically, the buyer will pay whatever fees are levied, and the cost can vary county-to-county. However, a seller might be responsible for part of this cost in some cases.

Attorney fees ($150-$350 per hour)

Sellers may opt to hire a real estate attorney to represent their interests and some states consider licensed attorneys to be “essential” for closing. A real estate attorney may draft and review closing documents, transfer property title, resolve legal barriers, and mediate contract disputes. The average cost of a real estate attorney is usually between $150 to $350 per hour.

Property taxes (prorated)

During closing, you and the buyer will also settle up on property taxes. The seller will pay for any taxes owed through their final day of ownership. And likewise, the buyer will be responsible for paying any taxes accrued starting from the day they take possession. Some municipalities pay taxes in arrears — i.e., when the bill comes, you’re actually paying for the previous six or 12 months of taxes owed.

Mortgage payoff (varies)

The day you sell your home is also the day your outstanding mortgage balance is due. Anything you owe will be subtracted from your home sale price. Contact your lender or servicer and request your payoff amount. The payoff amount is the total you’ll have to pay to satisfy the terms of your mortgage loan, including any interest you owe until the day you plan to pay your loan in full. Review our guide on how to sell a house with a mortgage for more details.

Seller concessions (2%-6%)

Sellers sometimes “gift” money or offer other incentives to buyers at closing to sweeten the pot. This may not be necessary if your home generates a lot of interest from buyers right away and your property is in high demand.

However, if you’re struggling to attract an offer or are in a slow market, offering concessions can help you negotiate a deal.

Seller concessions can fall into two different categories:

• When you offer to pay a portion of the buyer’s closing costs (which can tally up to anywhere from 2%-6% of the sale price), that’s called a financing concession. Financing concessions may cover origination fees, discount points, commitment fees, among other costs.
• When you offer to give the buyer a non-realty item of value, that’s called a sales concession. Sales concessions may include cash, furniture, decorating allowances, or moving costs, among other offerings.

Fannie Mae guidelines cap seller concessions — also called “interested party contributions“ — for conventional loans. For example, if a buyer puts less than 10% down, then the concession max is 3%. If the buyer puts down 10%-25%, then there is a 6% maximum. Any seller costs that exceed these limits would require a corresponding reduction in the loan amount.

How can I see the fees for my transaction?

You will get a chance to review all of these costs and fees in your seller’s settlement statement, a comprehensive list of fees and credits that shows your net profits as the seller and summarizes the finances of the entire transaction. If you want an estimation before closing, your real estate agent can provide a seller’s net sheet. Other helpful tools include HomeLight’s Home Value Estimator and our Net Proceeds Calculator.

Other costs associated with the sale

Relocation costs (1%)

After closing your sale comes everyone’s favorite part: moving! And depending on the timing of your home sale and how you orchestrate it with your next move, you may need to pay transition costs.

Overlap costs (1%-2%)

If you bought a new house before selling your existing home, you’ll have to cover the principal, interest, taxes, utilities, and insurance on two properties for several months. Alternatively, you might need to rent a storage unit, put a deposit on a transitional short-term rental, or pay for a partial move in order to stage the home.

Moving and relocation costs ($1,600)

There’s no way around it: Moving is expensive. It should be part of your budget as you look to sell your home. On average, it’ll cost you $1,711 for a local move. The cost of your move will vary based on factors including how much stuff you have, the distance of your move, the time of year, and which types of moving services you opt for.

Capital gains taxes (varies)

Profits made from the sale of appreciable assets — including your home — are often considered capital gains and subject to tax. However, it’s possible to exclude the profit, or capital gains, you made from selling your home when tax time rolls around if you meet certain criteria.

Under the capital gains tax exclusion, in the sale of a primary residence, the first $250,000 of profits are typically not taxed if you file your taxes as single (or $500,000 if you and your spouse file jointly) — and if you meet additional requirements. The IRS refers to this as the Section 121 exclusion. If you don’t qualify for capital gains tax exclusions, your home sale will be reported to the IRS through a 1099-S form. For more details, we always recommend talking to your tax advisor.

Example fees when selling a home

Now that you know what fees go into selling a home, let’s look at a potential example. Let’s say a seller in Massachusetts is selling a paid-off home for $500,000 in fairly good condition and only light updates needed. The seller streamlines the pre-listing process to the most essential tasks, installs a new front door for a great first impression, and does a few minor repairs based on the results of a pre-sale inspection.

In negotiations, the seller makes no concessions because it is a strong seller’s market, but they will have to pay transfer taxes for Massachusetts of 0.46%. Here’s a look at how that could potentially break down:

Preparation item	Estimated costs	% of sale price
Declutter	$0 (DIY)	0%
Deep clean	$0 (DIY)	0%
Refinish floors	$1,800 (Professional)	0.36%
Curb appeal	$1,000 (Light spruce up)	0.2%
Home staging	$1,230 (Professional)	0.25%
Light cosmetic updates	$1,500 (New entry door)	0.3%
Pre-sale inspection	$340	0.07%
Minor pre-listing repairs	$1,000	0.2%
Subtotal (prep costs)	$6,870	1.4%
Closing costs	Estimated costs	% of sale price
Real estate commission	$29,000	5.8%
Settlement / title fees	$10,000	2%
Transfer taxes	$2,300	0.46%
Seller concessions	None (Seller’s market)	0%
Subtotal (closing costs)	$41,300	8.3%
Total costs	$48,170	9.7%

 

Is it possible to avoid closing costs?

Closing costs are a part of every real estate transaction. But sellers can reduce their selling fees by working with a property investor or house buying company rather than listing. Many We Buy Houses for Cash companies offer to cover a seller’s closing costs in full.

By not listing the home, sellers can also eliminate home prep costs and sell their house “as is”. Selling for cash also usually eliminates the cost of real estate agent commission. However, selling for cash usually means accepting a lower offer amount.

It’s all about weighing the trade-offs for your situation. If you need to sell your house fast and would prefer to reduce prep costs and fees, consider an avenue such as HomeLight’s Simple Sale platform.

With Simple Sale, HomeLight provides an all-cash offer for homes in almost any condition. Our platform enables you to sell your home in as quickly as 10 days rather than what can be weeks or months.

You can skip staging and repairs, and sell without agent commissions or upfront selling costs. All you need to do is answer a few basic questions about your home’s condition, how much work it needs, and your selling timeline to get started.

How to save on fees in today’s market

After seeing the example above, you may be thinking 9.7% of the sale price is a high percentage, but as the housing market heats up again, sellers are regaining some leverage, with the potential to save on some of those fees.

Additionally, much of the increase in home value from the pandemic housing boom has been holding strong (though not in all markets). Depending on when you bought, the increase in home value alone can help soften the blow of fees associated with selling a house.

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