If you’re a homeowner and are considering selling your house, you might be expecting a huge payday.

However, there are many costs associated with selling your home. Things like Realtor commissions are ones that people expect, but there are lots of others you may not think about. The full amount of the home’s final price doesn’t go right into your pocket. In fact, all in all, you might only realize only 60 to 70 percent of the home’s value in net proceeds.

Let’s look at where the money goes, and how much you get to keep when you sell a home.

Average costs to sell a home

Whenever you sell a home, the old adage that it takes money to make money holds true.

The first thing you’ll want to do is hire a real estate agent to help you with the process. They can give you advice to help you prepare your home for sale and organize showings for potential buyers. Your agent will also help you throughout the process of receiving offers, comparing them and going through with closing. Of course, an agent must be compensated for their services, which is one of the largest costs related to selling your home.

Some of the other things you’ll do to prepare your home for sale will also cost money. If you own a home worth $500,000, for example, these are some of the costs that you can expect to pay.

Expense Cost Profit
Realtor commission 6% or $30,000 $470,000
Prep work $1,450 $468,550
Pre-listing inspection $375 $468,175
Repairs $500 $467,675
Mortgage payoff $150,000 $317,675
Closing costs $3,500 $314,175
Remaining bills on property $1,000 $313,175
Moving expenses $1,650 $311,525
Storage $500 $311,025

Agent commission

One of the biggest costs that homeowners pay when selling a home is agent commission. Most transactions involve two agents: one employed by the buyer and one employed by the seller. Typically, the commission amount is paid by the seller and split between the two agents.

The average real estate commission is between 5 and 6 percent of the home’s price. That means that you’ll have to pay $5,000 to $6,000 for every $100,000 of your home’s sale price. You may be able to negotiate a lower commission, however. Agents may be more likely to accept a lower rate when the home is expected to sell quickly, the local market is strong or the home price is relatively high.

There are also agents who offer very low commissions – as low as 1 percent, in some cases. Just be warned that this type of real estate professional, also known as a discount broker, may not have the same level of expertise as a traditional agent, and may not have as much time to dedicate to your interests. Also, only the seller’s agent is taking a cut in their fee; the buyer’s agent still gets their full share. So you’ll be paying more like 3 to 4 percent in commissions total.

Many homesellers try to avoid paying commission by listing their home as for-sale-by-owner (FSBO). If you do that, be prepared to assume the duties of a real estate agent, including showing the place to prospective buyers, negotiating and taking care of the transfer of title. Just 11 percent of home sales were FSBO in the last year, according to the National Association of Realtors (NAR).

Prep work

To get the best price for your home, you want to make sure it’s appealing to buyers. Consider hiring a home stager to make sure the interior of the home looks its best. According to NAR, 28 percent of seller’s agents said they staged homes before listing.

Stagers know how to enhance a home’s best features while minimizing its worst ones. They rearrange furniture and accessories, and may even repurpose a room in a way you wouldn’t have imagined. Staging costs an average of $1,608, according to data from HomeAdvisor — but it can boost the sale price of your home by 0.75 percent, which is a large amount for valuable homes. Curb appeal is also important, so some basic landscaping can be worth doing as well.

It’s also possible to virtually stage your home — that is, change the appearance of rooms in listing photos. That can mean adding furniture or art, or removing it; changing the color of walls or floors; or depicting different times of day or seasons. Costing a few dozen dollars per picture, digital staging is much less expensive than traditional physical staging.

Pre-listing inspection

While getting your home inspected before listing it for sale is optional, it can still be a good idea. If you learn about issues and fix them before putting your home on the market, that reduces the odds of a sale falling through or unexpected expenses if a buyer’s home inspector finds problems.

The inspection can cost around $400. Keep in mind that if your inspection reveals material defects with your home, you may have a responsibility to disclose them to a buyer, depending on your state’s disclosure laws. Even so, that upfront investment can help avoid costs or painful renegotiations down the road. A pre-listing inspection can also help you set a listing price or decide whether to sell your home as-is.


If you’ve lived in your home for a while, there are probably some issues that you’ve ignored or learned to live with. Before you sell your home, you might want to repair that leaky faucet or squeaky floorboard, for example. Alternatively, you can offer concessions to buyers, essentially giving them cash to put toward paying for the repairs. This option might be easier to do, but will likely cost more overall.

If the buyer’s home inspector finds major problems, such as a damaged roof or bad plumbing, you might have to pay to fix those issues in order to close the deal. Big repairs can really set you back financially, so be prepared for them before you decide to sell, especially if you expect problems will be revealed during a home inspection.

These are some of the most common repair costs that homeowners face:

Repair Cost
Source: SoFi
Foundation issues $10,000+
Electrical systems $2,000 – $6,000
Roof repair $300 – $2,000
Roof replacement $5,397 – $11,035
Water heater $579 – $1,300
Water damage $1,181 – $4,938
Leaky pipes $300 – $2,500
Septic systems $1,702 – $9,500
HVAC $577 – $12,500
Mold $2,218
Termite damage $565 – $8,000

Mortgage payoff

How much it will cost to pay off your mortgage depends entirely on your outstanding balance. You’ll have to cover the remainder of your loan out of the proceeds of the sale.

For example, if you owe $400,000 on your mortgage and sell your home for $500,000, you’ll have to give at least $400,000 right back to the lender. You’ll likely have to add prorated interest you’ve accrued to the total balance, too.

Some mortgages come with a prepayment penalty that you’ll also have to pay when selling your home. Check your loan documents or contact your lender to find out if your loan includes this condition. If there are any liens on your home, or you have a home equity loan or HELOC, you’ll also have to pay those off when selling.

Closing costs

In a real estate transaction, many closing costs are the buyer’s responsibility. But there are closing costs for sellers, as well.

Don’t be surprised if you are asked to foot the bill for some of the buyer’s costs, too, especially if it’s a buyer’s market. Some of these costs may include homeowners association fees, property taxes, attorney fees, transfer taxes and title insurance. You also may be asked to pay an escrow fee, a brokerage fee and a courier fee. Many closing fees are negotiable, though, and it’s unlikely that a seller will be responsible for all of them. Still, it helps to be prepared.

Some common closing costs include:

Closing cost Average cost
Attorney fees $950 – $1,500
Title insurance $1,000
Recording fees $125
Escrow fees 1% of the home’s value

Miscellaneous bills

When you sell your home, you’ll have to pay any outstanding bills related to the property, current through the signing of the purchase agreement finalizing the sale: HOA fees, utility bills. There’s also the bill for your home warranty, if you opted to get one.


You are very likely to have to pay some kind of taxes on your property when you sell it. The most common taxes that apply to a house sale are capital gains tax, property taxes, and transfer taxes.

Capital gains taxes

If you make a profit on your home – that is, you sell it for more than you paid to buy it – you may owe the IRS capital gains on your profits. For example, if you buy a house for $400,000 and sell it for $600,000, you may owe taxes on that $200,000.

The good news is, many homeowners are eligible to exclude up to $250,000 of profit (or $500,000 for married couples filing jointly) from their primary residence from federal income tax, as long as they haven’t used the tax break on another home sale within the past two years. You must have lived in the home (or at least designated it your primary home) for at least two out of the previous five years.

Each state has its own rules for capital gains taxes and home sales, so ask a tax professional about how your state’s taxes work.

Property taxes

Property taxes are paid every year to your state and municipality. The median annual property tax bill in the U.S. is $2,578, but yours will vary depending on where you live and your home’s value. You may have to pay for a whole year of property taxes, even if you sell your house part way through the year.

Transfer taxes

A real estate transfer tax, sometimes called a deed transfer tax, is a one-time tax or fee imposed by a state or local jurisdiction upon the transfer of real property. Usually, this is an “ad valorem” tax, meaning the cost is based on the price of the property transferred to the new owner.

The cost of the real estate transfer tax differs from state to state, with the amount based on the price of the property being transferred. You could pay as little as $50 or as much as several thousand dollars, depending on which state your property is in.

Moving expenses and storage

Selling your home is only one part of the equation. You also have to move all your belongings out of your old home, and into your new one. Moving costs money, whether you do it on your own or hire a moving company to handle it for you.

Hiring a service for a local move costs $1,000 on average, according to Moving.com, while long-distance moves can cost closer to $5,000. On the other hand, if you want to put in the effort yourself, you can save a lot on moving costs. If you can enlist friends for the cost of some pizza and drinks, you’ll have a lot less work to do. And renting a U-Haul can cost as little as $40 plus $1.59 per mile.

If you don’t already have a new home lined up when you sell, you may also need to store your things for a while, until you move into your new home. Storage facilities charge between $100 and $300 per month, according to Move.org, with larger units costing more. However, long-term leases can save you a bit of money.

Lost time

There are lots of costs that remain the seller’s responsibility until the sale closes and the buyers take ownership. For example, you’ll have to keep paying taxes and utilities even if you are no longer living in the home. These holding costs can add up significantly if your home sits on the market for a long time, or if closing is delayed.


  • In real estate, the gross profit is the difference between the home’s original purchase price and subsequent selling price, not taking into consideration buying costs and selling expenses. The amount of actual profit, aka the net proceeds, is the home’s sales price, minus closing costs, agents’ commissions and any costs you incurred to spruce up and list the home.
  • There is no easy formula for working out how much of the cost of the sale you keep. Once all the costs associated with selling your house are taken into account, you might see 85 percent of the total sale cost, or it might be closer to 60 percent.
  • It depends on whether you have a mortgage or not. If you still have a mortgage when you sell your home, the proceeds from the sale are used to pay off your existing loan balance. If you don’t make enough from the sale of your home to pay off your mortgage, you’ll have to keep paying it. If you don’t have a mortgage, you’ll receive the full sale cost in cash, minus the selling expenses.

Final word on the money you keep from a home sale

Even if your home sells for significantly more than you bought it for, it’s important to remember that there are lots of costs associated with selling. The fees you pay will depend on your specific situation. A little planning, preparation and budgeting can help ensure that more money stays in your pocket after the sale.