Understanding the home selling costs you’ll encounter is a critical step toward a successful and predictable sale. Homeowners typically spend between 10% and 15% of the sale price on these expenses. For a home that sells for $400,000, this could mean $40,000 to $60,000 in total costs. Key expenses include:

• Real estate agent commissions
• Closing costs and title fees
• Prorated property taxes
• Home preparation and repair costs
• Paying off your existing mortgage

The Largest Expense: Agent Commissions

Agent commissions are often the single largest cost when selling your home. This fee is negotiated in the listing agreement and is typically split between the buyer’s and seller’s agents. It is calculated as a percentage of the final sale price.

A Breakdown of Seller Closing Costs

Closing costs refer to the administrative and legal fees incurred at the closing of the transaction. For sellers, these often include:

• Fees for document recording
• Charges for escrow and title services
• Prorated utilities and property taxes
• Any seller concessions agreed upon in the contract

Paying Off Your Existing Mortgage

If you have a mortgage, the remaining balance must be paid off at closing. Your lender will provide an official payoff amount that includes both the principal balance and any accrued but unpaid interest. If your home sells for less than what you owe (a short sale), you will need to pay the difference.

Prorated Property Taxes and Utilities

As the seller, you are responsible for your share of property taxes and utilities up to the closing date. For example, if your annual property tax bill is $6,000 and you sell exactly halfway through the year, you’ll be responsible for $3,000 at closing.

Home Preparation and Repairs

Preparing your home for the market can increase its value and lead to a faster sale. Common preparation costs include:

• Minor repairs and maintenance
• Fresh paint and updated flooring
• Professional home staging, which can cost between $500 and $2,500

Title Insurance and Inspections

• Title Insurance: This policy protects the new buyer from future ownership disputes and disputes related to the property. While buyers typically pay for their own policy, sellers may agree to cover this cost during the negotiation process.
• Inspections: Some sellers opt for a pre-listing inspection to identify and fix issues upfront. While the buyer usually pays for their own inspections, some cities require a municipal inspection (often $75–$125) before a sale can be completed.

Final Thoughts: Plan for a Smooth Sale

Understanding your home selling costs helps you accurately calculate your net proceeds and avoid financial surprises. Contact your lender to confirm your mortgage balance and partner with a real estate agent and title company to navigate the process. By budgeting for commissions, closing costs, taxes, and repairs, you’ll be prepared to sell your home with confidence.