As a homeowner, you’re used to hidden expenses. But the last place you want to encounter them is when selling your home. Getting the most from selling your house requires a deep understanding of every cost — including which you can skip and which will improve your ROI.  

To discover the true costs of selling a home, we spoke to Sarah Lyons, one of the top-performing real estate agents in the Dallas-Fort Worth area. Throughout her career, Sarah has sold over 535 properties, with sales totaling more than $160 million. 

In addition to talking to Sarah, we scoured the web for cost estimates for common pre-sale projects, reviewed local and federal tax rules, and tallied the average home-selling expenses. Here are the results.

What affects the cost of selling your home?

There’s no easy way to determine selling costs, but Lyons suggests sellers start with general estimates based on the value of their homes.

“The quick rule of thumb is about 8% of the contract price,” she explains. “That’s just the ballpark.”

Of course, 8% is just Sarah’s yardstick—there are other methods of estimation. Typically, the cost to sell a house is between 8% and 10% of the sale price. Your final costs will vary, depending on the specifics of your home. 

According to Lyons, four major factors can impact the final costs of selling your home:

1. Your home’s condition: Your home’s condition will help you determine how much to invest in repairs. Generally, you’ll get a larger return on investment for repairs on a property in poor shape (such as foundation repairs) than modifications on a relatively new property (such as a cosmetic remodel).

“With the condition, appraisers use a five-point scale,” Lyons says. “Tier 1 would be brand-new construction. Tier 2 is basically driven off the lot, anything that's pre-owned but very like-new. And then it goes down from there.”

If your home is in great condition, you could make minor, inexpensive updates: cleaning and light repairs. If it’s in poor condition, you might need to invest more money — and that cuts into your bottom line. 

2. Your agent’s commission: Real estate agent commission rates vary — and a recent settlement by The National Association of REALTORS® (NAR)  is likely to upend the traditional structure of commissions. According to a release by the NAR, they’re changing several rules for agents:

• Agents won’t be allowed to list their compensation on the MLS.

• Brokers won’t have to subscribe to an MLS.

• Buyer’s brokers will be required to enter into contracts with buyers.

A consequence of these changes is that real estate agent commissions could fluctuate from the typical range of 5% to 6%. 

Of course, many home sellers don’t want to worry about negotiating the best agent commission on top of all the preparations they need to make to sell their home. Redy lets you see an agent’s commission rate upfront—before you decide to contact them. No negotiations, just proposals.

3. Your location: Your home’s location impacts many factors: its overall value, taxes, state-by-state fees, and other sale costs, all of which will ultimately affect your profits. Your real estate agent can give you more information regarding what to expect, but some of these will not be fully illuminated until the escrow phase, so it’s essential to plan for a buffer.

4. Your listing method: Listing your home the traditional way frequently means paying full commission. On Redy, agents offer you a cash reward for working on your home sale. With Redy, you view agents’ rates before you talk to them — even better, home sellers save an average of $5,862 with ready and sell their homes for an average of 12% more.

How much does selling your home cost at each stage?

Lyons helped us sort the most common home selling costs into stages to estimate better how much it costs to sell a home. Here’s a deeper look at the most typical costs of selling a home, step by step, including estimates for each item:

Cleaning and decluttering ($0 - $400)

Lyons says cleaning and decluttering your home is a simple presale step that can help attract more buyers.

“Find as much natural light as possible,” she suggests. “I normally remove curtains, especially heavy or dark curtains, clean windows inside and out, and sometimes even remove the window screens. I’m going through and ensuring all the lighting is working, and you don't have bulbs that are out.”

If you decide to clean and declutter on your own, you can avoid professional fees. If that’s the case, expect to spend $0 to $50 on cleaning supplies, depending on what you already have. And “broom swept” can be enough for properties already in excellent condition.

But it may be worth calling the professionals if you don't want to do the work yourself (or you’re worried about your cleaning skills). And it might not be as expensive as you think. The average cost of hiring a cleaner is $300.

Staging ($400 - $600) 

Home stagers arrange furniture, decorate, and otherwise prepare your property to be visually appealing to a buyer. A good home stager helps the buyer imagine themselves living in your home while accenting its most positive aspects. 

According to NAR, 81% of buyers’ agents say staging helps buyers imagine themselves within a property. The same study found that home sellers spend an average of $400 when their agent does the staging and $600 when a staging service does the work. 

If you don’t want to redecorate your home or spend time moving furniture, you may also consider investing in digital staging. Digital staging uses technology to redecorate your home virtually—highlighting the elements that could appeal to the buyer. According to NAR estimates, you can expect to spend $49 to $399 on digital staging, depending largely on the number of photos you upload and the amount of furnishings that need to be removed from the images.

Repairs and improvements ($1,000 - $6,000)

Repair costs can vary wildly, depending on your property’s needs. However, if your home isn’t in dire need of repair, Lyons suggests keeping upgrades to a minimum. 

“Generally speaking, when I'm talking about condition with a seller, I’m looking to do whatever is cheapest, easiest, and most cost-effective for their return on investment, ” she says.

Simple landscaping is one popular property improvement that may help your home stand out. According to the home improvement site Angi, the average cost of landscaping is around $3,500. 

Real estate commission (5 to 6% of the sale)

Traditionally, real estate agent commission has been among the most significant expenses during the home sale process. According to a Statista study, the average real estate agent commission is just over 5% of your sale price, which amounts to $20,000 on a $400,000 home.  However, as we mentioned earlier, the recent NAR settlement could reshape how real estate commissions are structured, potentially giving you an advantage as a seller. 

And if you use a platform like Redy’s, you can review an agent’s commission rate upfront without having to sit down and talk with them first. At Redy, real estate agents offer you a cash reward to let them handle your home sale. You have the control to review an agent’s rates and evaluate their cash reward before you even reach out to them. 

Escrow expenses

Escrow fees are the portion of your closing costs that go to attorneys, title companies, and other third parties — professionals who handle the fine details when wrapping up your sale. There are a few typical escrow costs for sellers to consider:

Title fees (0.5% to 1% of the sale)

Title fees cover the work title companies do when they search for issues with the title (like liens) and make adjustments. The final total for title fees will vary, but Lyons says they tend to be around $900 to $950. Depending on where you’re selling, these fees may be expressed as a percentage rather than a set fee — about 0.5% to 1%. 

Transfer taxes and recording fees (1% of sale) 

Most states charge transfer taxes to swap a property from one owner to another. Some states charge a flat fee for these taxes, and others charge based on the total price of a sale. According to an Altus Group report, 38 states require transfer taxes. The same report found that most states’ transfer taxes are less than 1% of the home’s value.

Title insurance (1% of sale)

Title insurance helps protect the seller if issues or claims come up that weren’t found in the initial title search. The seller tends to pay for title insurance, although your real estate agent may be able to negotiate this cost for you. Fannie Mae estimates the average cost of title insurance is around 1% of the home’s value. That comes to $4,000 on a $400,000 home sale. 

Prorated property taxes (1.1% of the sale)

Foremost, be aware that taxes are complicated — we aren’t financial advisors and you should always consult a professional. 

During a sale, property taxes are usually prorated. Typically, as a seller, you’ll pay the buyer your share of the property bill for the year when you close. So, if you sell later in the year, your share of the prorated property tax will be higher than if you sell earlier. 

Lyons explains: “Oftentimes the closing costs will look larger to a seller as they get closer to the end of the year because they're incurring a larger proration as the years go on. For example, if you have a tax bill of $9,000 or $10,000, and you close halfway through the year, you would have a $4,500 expense as additional closing costs towards that for the buyer to pay the full bill at the end of the year.”

According to a Business Insider study, the average property tax percentage in the U.S. is 1.10%. At that average rate, if your house is worth $400,000 and you sell halfway through the year, you can expect to pay around $2,200 in prorated property tax when you close your sale. 

Long-term capital gains tax (0%,15%, or 20% of net proceeds)

With capital gains tax, you’ll need to pay a tax on the amount of money you netted on your home as an investment. However, according to the IRS, you could qualify for a capital gains tax exemption if you sell your main home. To be eligible for this tax exclusion, sellers must have lived in the property for at least two of the five years leading up to the sale. 

If you qualify, you won’t have to pay tax on the following gains:

• Less than $250,000 of net proceeds as an individual.

• Less than $500,000 of net proceeds for a married couple.

According to the IRS’s “Capital gains and losses” page, you may also skip capital gains taxes if your income level is below $44,625 as an individual filing separately, $89,250 as a couple, or $59,750 as the head of a household.  

If you don’t qualify for a capital gains tax exemption, the IRS will expect 15% to 20% of the net proceeds on your long-term investment. Capital gains could be higher if you sell a property as a short-term investment. On the earlier-cited IRS “Capital gains and losses” page, they note that they tax short-term gains on “ordinary income at graduated tax rates.”

If you’re renting out your property and plan on buying a similar rental property, you may also qualify for a 1031 exchange. According to the IRS, the 1031 exchange allows you to put off capital gains taxes on a property when you reinvest in a similar property. 

Moving expenses ($120 to $4,800)

Moving costs vary, depending on whether you’re able to do the move yourself or you’d prefer to hire a moving company. According to Angi, a do-it-yourself (DIY) move can cost anywhere from $120 to $2,300.

Those costs increase when you hire a moving company, although it can be worth it for peace of mind. According to the home advice site Bob Vila, the average cost to hire professionals to complete a move ranges from $1,711 for local moves to $4,792 for long-distance moves.

The cost of selling a home at a glance

Home-selling expense                         Estimated average cost (on $400,000 sale)             

How much does it cost to sell a $400,000 home?

So, how do selling costs add up during a typical sale? In the above scenario — assuming a capital gains exception — the total costs come to $35,300. Overall, that amounts to 8.8% of the home sale price. While Lyons had provided us with a rough estimate, it came close!

Remember, costs will vary depending on your property’s location, size, and details. To calculate your sale costs more accurately, adjust each expected cost to fit your home’s location, condition, and size. This should give you a rough idea of your total sale costs. 

Save money during your home sale.

This cost overview should help you estimate your home’s sale costs. However, you may have noticed that the most significant cost is commission. With Redy, you can evaluate agent rates without any pressure — and see how much money experienced agents are willing to offer for a chance to sell your home. 

Eliminate the hassles of negotiating commissions, interviewing agents, and seeing your money slip through the cracks. Get started with a free account with Redy. 

Cole Kelly is a copywriter with more than ten years of experience. His writing includes PR, magazine features, content marketing, website copy, conversion paths, and emails. He specializes in writing for real estate, technology, SaaS, and manufacturing companies.