Selling a house involves several costs and fees that can significantly impact the seller’s net proceeds. Here are some of the common costs associated with selling a house:
1. Real Estate Agent Commissions:
- Typically, the largest expense, real estate agents charge a commission of about 5-6% of the sale price, which is usually split between the buyer’s agent and the seller’s agent.
2. Home Repairs and Improvements:
- Sellers often need to invest in repairs or improvements to make the home more appealing to buyers. This can include minor repairs, painting, landscaping, and staging.
3. Closing Costs:
- Sellers may be responsible for a portion of the closing costs, which can include title insurance, escrow fees, and attorney fees. These can amount to 1-3% of the sale price.
4. Home Inspection and Appraisal:
- The seller might pay for a pre-listing inspection to identify potential issues that could be deal-breakers for buyers. Sometimes, sellers also pay for an appraisal to set a competitive price.
5. Seller Concessions:
- In some markets, sellers may offer to pay part of the buyer’s closing costs as an incentive. This can range from 2-5% of the sale price.
6. Capital Gains Tax:
- If the home has significantly appreciated in value, sellers might owe capital gains tax. However, there are exemptions, such as the $250,000 exclusion for single filers and $500,000 for married couples filing jointly, provided the home was the primary residence for at least two of the past five years.
7. Mortgage Payoff:
- The remaining balance of the mortgage must be paid off at closing, including any early payoff penalties.
8. Moving Costs:
- Expenses for moving belongings to a new residence, which can include hiring movers, rental trucks, and storage units.
9. Utilities and Maintenance:
- While the home is on the market, the seller continues to be responsible for utility bills, property taxes, homeowner’s insurance, and maintenance.
10. Home Warranty:
- Some sellers offer a home warranty to the buyer as a selling point. This can cost between $300 and $600.
11. Marketing Costs:
- If selling without an agent (FSBO), the seller might incur costs for marketing, such as online listings, professional photography, and signage.
These costs can add up, and it’s important for sellers to budget for them to avoid surprises and ensure a smooth transaction.
