Before you make the move, it’s essential to understand the costs involved.

The cost to sell a home today can vary widely depending on several factors like location, property value, real estate agent fees, and other related expenses. Below is a breakdown of the typical costs associated with selling a home:

1. Real Estate Agent Commission

Cost: 5%–6% of the home’s sale price (split between the buyer’s and seller’s agents).

Details: This is usually the largest expense. The commission was typically split between the seller’s agent and the buyer’s agent. In today’s market and after the National Association of Realtors lawsuit, the buyer’s agent commission is a negotiable variable in the sales contract. The final numbers will depend on market conditions and if we are in a buyers or sellers market.

Example: If you sell a home for $600,000, an average 5.5% commission could be $33,000.

2. Home Repairs and Improvements:

Cost: $500–$5,000 or more, depending on the extent of repairs.

Details: Depending on the condition of your home, you might need to make repairs to bring it up to market standards. Some sellers also opt for cosmetic updates (painting, landscaping, etc.) to make the home more attractive to buyers. Painting the home in neutral sellable colors is typically the best cost improvement on a home.

3. Staging Costs (Optional):

Cost: $1,000 to $4,500 (or more depending on the size of the home).

Details: Home staging involves arranging furniture and decor to make the home more appealing to buyers. This is an optional cost but can help sell the home faster and for more dollars. A perfect example of this is a builder’s model home and how beautifully they are staged.

4. Closing Costs

  • Cost: 1%–3% of the sale price.
  • Details: These costs include various fees such as title insurance, escrow fees, attorney fees, and other administrative costs related to the sale.
  • Example: On a $600,000 home, this could range from $6,000 to $18,000 in closing costs.

5. Transfer Taxes/Recording Fees (Closing Costs):

  • Range: Varies by location (usually 0.1% to 3% of the sale price).
  • Details: These are local government fees for transferring the title of the property to the new owner.

6. Pre-Sale Inspections (Optional)

  • Cost: $400–$800.
  • Some sellers choose to have a pre-sale inspection to identify issues that might come up during the buyer’s inspection to eliminate any possible surprises. This can be for structural elements, plumbing, or electrical systems.

7. Capital Gains Taxes (If Applicable)

Range: Varies based on how long you’ve owned the home and the amount of profit. The tax rate varies, so consult a tax professional.

Details: If your home has appreciated significantly, you might owe capital gains taxes, though many sellers are exempt due to the home sale exclusion rule, which allows up to $250,000 (or $500,000 for married couples) in tax-free profit on the sale of a primary residence.

8. Mortgage Payoff Fees

Range: Varies based on your loan balance.

Details: If you still have a mortgage, you will need to pay off the remaining balance at the time of sale. Be mindful of any prepayment penalties and any amounts held in escrow with your mortgage company that can offset any mortgage payoff fees.

9. Other Potential Costs

  • HOA Fees: If your home is in a community with a homeowner’s association.
  • Utility Bills and Property Taxes: You’ll need to cover these until the sale is finalized.

Total Estimated Costs:

  • Overall cost range: 6%–10% of the home’s sale price.
  • Example: For a $600,000 home, expect to pay between $36,000–$60,000 in total selling costs.

Costs can fluctuate based on your local real estate market and the condition of your home.

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When making a major financial decision, it’s essential to understand all the factors that contribute to the overall cost to ensure your real estate investment pays off. These elements, which can vary based on location and current market conditions, will guide you in making a smart choice. For more insights, feel free to reach out via phone at 703-646-1750 or email me at janet@simplyyourbestmove.com.