What Are the Costs of Selling a House in 2024?

Ellie Brooks

Written By Ellie Brooks

Published 12/11/23
What Are the Costs of Selling a House in 2022

Buying a house is certainly expensive. What about selling one?

Homeowners new to the selling process might look forward to a windfall of money when a sale is completed—especially if their home’s value has increased substantially over the years. But while a home sale will provide a sizeable chunk of change, there are quite a few costs to consider, from real estate commissions and fees to taxes.

Being informed about all that contributes to the cost of selling a house will give you a more accurate estimate of how much money you can expect to make. Thorough knowledge of the sale process could help you save some money along the way too.

Are you selling your house to realize some investment gains in a hot housing market? Here’s what you need to know.

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What Is the Average Cost of Selling a House?

The dollar cost of a home sale is dependent on several factors. A home’s value, of course, will affect the real estate agents’ commission and the taxes due to the state. There are also moving costs, preparation costs, inspections, home improvements, title insurance, and more, all of which can fluctuate in price.

According to Zillow, the typical home value in the United States in 2022 is $349,816. The real estate commission is usually 6%, which would be just shy of $21,000 on a home of that value. Standard taxes and fees can run to about 4% of a home’s value, or nearly $14,000 in this example. Moving costs for a fully furnished home are thousands of dollars, and there are expenses associated with staging and improving the home to facilitate a sale.

As you can see, the cost of selling a home of typical value in the United States can quickly exceed $40,000.

What Are the Costs Associated With Selling a Home?

Home sale costs can be grouped into the following categories:

  •          Home sale preparations and improvements
  •          Moving and packing costs
  •          Closing commissions, fees, and taxes
  •          Concessions to buyers
  •          Mortgage payments

Let’s look at each category in more detail.

1. Home sale preparations and improvements

A lot goes into preparing a home for potential buyers. We might overlook a little bit of a mess or an unkempt yard in our own homes, but buyers are more inclined to make offers on well-staged homes with significant curb appeal.

As a seller, you may consider hiring a cleaning service and professional stager. Depending on your home’s age and condition, you could invest in carpet cleaning, interior and exterior painting, landscaping and tree removal, appliance replacements, and other home improvement necessities.

A home inspection is often the buyer’s responsibility, but many real estate professionals recommend that sellers pay for a pre-inspection. This can minimize the chance of a buyer backing out of a deal after discovering a structural problem or code violation that was unknown to the seller.

Finally, there are marketing costs, which a real estate agent may or may not cover. Marketing efforts include professional photographs, advertisements, signage, and online listing fees.

2. Moving and packing costs

The expenses related to vacating a home quickly add up. Even if you pack your belongings yourself, you will likely spend $200 or more on boxes, bubble wrap, packing tape, and other packing materials.

Moving costs for an average home can exceed $2,000, and that figure can balloon to more than $5,000 for large homes or long-distance moves. Some larger items, such as pianos, may require specialized movers.

If there’s a gap between when you must vacate your current home and when you can move into your next one, you’ll also have hotel and meal costs to consider.

3. Closing commissions, fees, and taxes

What are all the fees when selling a house? There are quite a few.

The most significant is the real estate commission. This usually amounts to 6% of the home’s sale price. Often, 3% goes to the seller’s agent and 3% to the buyer’s agent.

Many U.S. states require the presence of a real estate attorney during the sale process. Attorneys’ fees factor into closing costs, as do escrow fees. Neighborhoods with a homeowner’s association may have HOA fees as well.

Title insurance is another expense. This is meant to provide financial protection to mortgage lenders and buyers if there’s a problem with the property title, such as unpaid taxes or liens.

How much tax do you pay when selling your house? It depends.

Sellers are responsible for prorated property taxes upon closing. That is, sellers pay in advance their property taxes for the time spent in the home during the tax year in which the sale occurs. This figure, of course, is entirely dependent on the home and its location.

There is also a transfer tax, which can be a fraction of a percent to as much as 4% of a home’s value. The rate varies from state to state and is often bracketed to correspond to certain home values.

Finally, there may be capital gains taxes, which are due come tax season. These are taxes on profit you have earned from your home’s appreciation over time. Many sellers will be happy to find themselves exempt from capital gains taxes, however. Single taxpayers don’t need to pay taxes on gains under $250,000. That figure doubles to $500,000 for married taxpayers filing jointly.

4. Concessions to buyers

Some selling expenses aren’t necessarily required but are still wise investments. It’s not uncommon for sellers to cover some of the buyer’s closing costs, for example. This can generate interest in your home and expedite a sale.

A home warranty when selling a house is also a good idea. A seller’s home warranty can be transferred to buyers after closing, and this policy protects the new homeowners financially if an appliance or system were to break down within a reasonable amount of time after closing. Warranties can also raise home values and hasten home sales. Warranty prices vary based on the extent of coverage.

5. Mortgage payments

A final cost to consider is the mortgage balance. If you haven’t paid off your home loan, you of course need to use your home sale proceeds to make things square with your lender. Some contracts stipulate a prepayment penalty, which is an additional expense to keep in mind.

How to Keep More Money in Your Pocket

It’s clear that the costs that go into selling a home quickly add up. A little due diligence can keep your expenses down, however. Enlist some friends and family to help you pack and stage your home. Ask your realtor if the 6% commission is negotiable. Take a DIY approach to some home improvement projects. And don’t neglect the concessions that justify an increase in your asking price.

A home warranty may be an additional monthly expense, but it can pay for itself in the value it adds to your home. It also brings remarkable peace of mind, for you can rest easy knowing that a surprise appliance or system breakdown will be resolved swiftly and affordably. Use our website for a free quote on a Liberty Home Guard plan or call (866)-923-2371.

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