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How Much It Costs to Sell a Home Depends on THESE Factors, Say Experts
Jump to:Selling your home is often a long and confusing process, especially if you've never done it before. And while homebuyers are subject to a much clearer set of expectations and costs—they're the ones making the offer after all—how much it costs to sell a home is less understood.“There is no set cost to sell a house,” says Amanda Pendleton, Zillow’s home trends expert. “Sellers will want to prepare for a range of 10 to 15 percent of the sale price. An online home sale proceeds calculator can provide a great initial estimate of those costs.” It's also important to know how certain costs may differ.“The overall transaction costs of selling a house include expenses in two main areas: likely costs and potential costs,” Pendleton continues.Likely costs include things like commissions, closing costs, taxes, and attorney fees. On the other hand, potential costs include renovations or remodel costs, home staging, HOA fees, and temporary housing or storage. Think of potential costs as largely optional or on a case-by-case basis. Our guide ahead helps break down the many components to the question, "how much does it cost to sell a home?" and our experts have plenty of insights to share. Read on for everything you need to know.Related StoriesHow Much Does It Cost to Sell a Home?seksan Mongkhonkhamsao//Getty Images“On average, it costs about eight to 10 percent of the home's sale price to sell a home in the U.S. For a home, that’s roughly to ” says Jake Krimmel, a senior economist at Realtor.com. “This cost includes items like agent commissions, seller-paid closing costs, repairs and improvements needed to list a house, staging and marketing, and transfer taxes and fees. It is important to note that costs are likely to vary based on the market, property conditions, and buyer/seller negotiations.”Related StoryMain Costs to ConsiderPendleton recommends budgeting 10 to 15 percent of your asking price to cover all selling costs.Real Estate CommissionsThe primary cost to keep in mind when selling your home is the commission rate that you'll pay to your broker or real estate agent. Krimmel estimates that it is “typically five to six percent of the sale price, split between the listing agent and the buyer’s agent. For example: On a home with a six percent commission, would go to commissions.”Transfer TaxesPendleton estimates that approximately two to four percent of the selling price is spent on transfer taxes and other real estate fees. As the name suggests, this tax is paid to "transfer" the deed of ownership from the seller to the buyer. Think of the transfer tax as a sort of sales tax or transaction fee. Below, Krimmel breaks down the transfer taxes in three major areas of the country. Washington, D.C.: Up to 1.45 percent transfer taxNew York City: Has both state and city transfer taxes, often totaling 1.4 to 2.075 percentCalifornia: Typically has smaller transfer taxes, but they may also include city-specific feesOn average, it costs about 8–10% of the home's sale price to sell a home in the U.S.Capital Gains TaxesIf you profit from your home sale, you could also be faced with a capital gains tax. “Sellers could be subject to capital gains tax depending on, you know, how long they've owned it, whether it's their principal residence, and how much money they're making on the sale,” says Jared Antin, expert realtor and managing director of Elegran Real Estate.According to Rocket Mortgage, “The capital gains tax can apply to any type of asset that increases in value. Most people encounter this tax when they sell their primary residence. You may be subject to the capital gains tax if your home’s sale price is more than what you initially paid for it.” You won't pay this tax at closing. Instead, this tax is typically paid within the same year you buy your home, or the next time you file your taxes.However, if you meet certain qualifications, you can exempt your home sale from the capital gains tax. For those who file taxes as single, the IRS may allow you to exclude up to of gains, and up to if married and filing jointly. The property you're selling must be your primary residence, owned by you for longer than two years, and you must have lived in it for at least two years leading up to the sale. You will be denied this tax exemption if you've given up your USA citizenship, claimed this exemption recently, or bought this property through a like-kind exchange. Related StoryCommon Categories to Budget ForMortgage Pay-OffMost people will sell their home before they've finished paying off the mortgage. Antin explains that it's important for the seller to know how much they need to sell their home for to break even after paying off the mortgage. In most cases, sellers use the profits from their homes to place new offers on property wherever they may be moving to.“In New York City, about 65 percent of our recent transactions have been cash, so New York City tends to have a larger share of the buyers that have never had a mortgage, but generally speaking, unless the person has lived in the house for 30 plus years, if they had a mortgage, they generally still have an amount owed,” Antin continues. Repairs and RenovationsWhile the home buyer will pay for your home to be appraised and inspected, they often negotiate for the seller to cover the costs of any repairs and maintenance needed prior to their move-in date. This could be as simple as trimming an overgrown tree or updating smoke alarms to high-maintenance changes like new garage doors or a new water heater.MovingRobert Daly//Getty ImagesMoving fees are a commonly forgotten cost in the process of selling a home. Whether you're renting a truck and moving yourself or hiring a team to take you cross-country, you'll need to budget for labor, vehicles, and tips for the movers. Moving costs have a wide range, from to about depending on the size of your home and how far you're moving. Attorney FeesIf you're in an attorney closing state—Delaware, Georgia, New York, Virginia, North Carolina, South Carolina, West Virginia, and Alabama—you'll be required to have a lawyer oversee the sale of your home. “During this process, the attorney that's representing the seller prepares the purchase contract and then the buyer's attorney goes back and forth with the seller's attorney to review it and align on the language for the contract,” Antin explains.Related StoryFAQs on the Costs of Selling a Homespawns//Getty ImagesWhat will I pay when I sell my house?According to Krimmel, most money that comes out of the seller's pockets is paid from money made in the sale, rather than costs to pay up front. “Realtor commissionsand closing costssuch as title insurance, escrow fees, transfer taxes, and repairs to prep for listing, such as painting, landscaping, and deferred maintenance, are all examples of costs that the seller is responsible for.”Do sellers pay any closing costs?Other than commission rates, Antin explains that most traditional closing costs fall on the home buyer, not the seller. The seller will pay the commission rates, any taxes owed, and the remainder of their mortgage. What is a common mistake people make when selling a home?“One big mistake is mispricing the home,” says Krimmel. “Overpricing can lead to the home sitting on the market, price cuts, and ultimately selling for less than if it were priced correctly from the start. Why? Because if a home sits on the market for too long and/or the seller keeps dropping the price, buyers will assume something is wrong with the home. Plus, as the home sits unsold, the buyer still has to pay their normal mortgage, taxes, utilities, etc. Even if the home is unoccupied.” Follow House Beautiful on Instagram and TikTok.Expert consulted:Jared AntinReal Estate BrokerJared Antin has built a distinguished career in the real estate industry, excelling in both development and brokerage roles. Rising quickly from a successful agent to Managing Director at Elegran Real Estate, he has been recognized as one of NYC’s “Rising Stars” by Crain’s. As a member of Elegran’s executive leadership team, Jared drives strategy, fosters innovation, and leads the firm’s growth while maintaining its collaborative culture. He is passionate about supporting agents and strengthening relationships within the team and the real estate community.
#how #much #costs #sell #home
How Much It Costs to Sell a Home Depends on THESE Factors, Say Experts
Jump to:Selling your home is often a long and confusing process, especially if you've never done it before. And while homebuyers are subject to a much clearer set of expectations and costs—they're the ones making the offer after all—how much it costs to sell a home is less understood.“There is no set cost to sell a house,” says Amanda Pendleton, Zillow’s home trends expert. “Sellers will want to prepare for a range of 10 to 15 percent of the sale price. An online home sale proceeds calculator can provide a great initial estimate of those costs.” It's also important to know how certain costs may differ.“The overall transaction costs of selling a house include expenses in two main areas: likely costs and potential costs,” Pendleton continues.Likely costs include things like commissions, closing costs, taxes, and attorney fees. On the other hand, potential costs include renovations or remodel costs, home staging, HOA fees, and temporary housing or storage. Think of potential costs as largely optional or on a case-by-case basis. Our guide ahead helps break down the many components to the question, "how much does it cost to sell a home?" and our experts have plenty of insights to share. Read on for everything you need to know.Related StoriesHow Much Does It Cost to Sell a Home?seksan Mongkhonkhamsao//Getty Images“On average, it costs about eight to 10 percent of the home's sale price to sell a home in the U.S. For a home, that’s roughly to ” says Jake Krimmel, a senior economist at Realtor.com. “This cost includes items like agent commissions, seller-paid closing costs, repairs and improvements needed to list a house, staging and marketing, and transfer taxes and fees. It is important to note that costs are likely to vary based on the market, property conditions, and buyer/seller negotiations.”Related StoryMain Costs to ConsiderPendleton recommends budgeting 10 to 15 percent of your asking price to cover all selling costs.Real Estate CommissionsThe primary cost to keep in mind when selling your home is the commission rate that you'll pay to your broker or real estate agent. Krimmel estimates that it is “typically five to six percent of the sale price, split between the listing agent and the buyer’s agent. For example: On a home with a six percent commission, would go to commissions.”Transfer TaxesPendleton estimates that approximately two to four percent of the selling price is spent on transfer taxes and other real estate fees. As the name suggests, this tax is paid to "transfer" the deed of ownership from the seller to the buyer. Think of the transfer tax as a sort of sales tax or transaction fee. Below, Krimmel breaks down the transfer taxes in three major areas of the country. Washington, D.C.: Up to 1.45 percent transfer taxNew York City: Has both state and city transfer taxes, often totaling 1.4 to 2.075 percentCalifornia: Typically has smaller transfer taxes, but they may also include city-specific feesOn average, it costs about 8–10% of the home's sale price to sell a home in the U.S.Capital Gains TaxesIf you profit from your home sale, you could also be faced with a capital gains tax. “Sellers could be subject to capital gains tax depending on, you know, how long they've owned it, whether it's their principal residence, and how much money they're making on the sale,” says Jared Antin, expert realtor and managing director of Elegran Real Estate.According to Rocket Mortgage, “The capital gains tax can apply to any type of asset that increases in value. Most people encounter this tax when they sell their primary residence. You may be subject to the capital gains tax if your home’s sale price is more than what you initially paid for it.” You won't pay this tax at closing. Instead, this tax is typically paid within the same year you buy your home, or the next time you file your taxes.However, if you meet certain qualifications, you can exempt your home sale from the capital gains tax. For those who file taxes as single, the IRS may allow you to exclude up to of gains, and up to if married and filing jointly. The property you're selling must be your primary residence, owned by you for longer than two years, and you must have lived in it for at least two years leading up to the sale. You will be denied this tax exemption if you've given up your USA citizenship, claimed this exemption recently, or bought this property through a like-kind exchange. Related StoryCommon Categories to Budget ForMortgage Pay-OffMost people will sell their home before they've finished paying off the mortgage. Antin explains that it's important for the seller to know how much they need to sell their home for to break even after paying off the mortgage. In most cases, sellers use the profits from their homes to place new offers on property wherever they may be moving to.“In New York City, about 65 percent of our recent transactions have been cash, so New York City tends to have a larger share of the buyers that have never had a mortgage, but generally speaking, unless the person has lived in the house for 30 plus years, if they had a mortgage, they generally still have an amount owed,” Antin continues. Repairs and RenovationsWhile the home buyer will pay for your home to be appraised and inspected, they often negotiate for the seller to cover the costs of any repairs and maintenance needed prior to their move-in date. This could be as simple as trimming an overgrown tree or updating smoke alarms to high-maintenance changes like new garage doors or a new water heater.MovingRobert Daly//Getty ImagesMoving fees are a commonly forgotten cost in the process of selling a home. Whether you're renting a truck and moving yourself or hiring a team to take you cross-country, you'll need to budget for labor, vehicles, and tips for the movers. Moving costs have a wide range, from to about depending on the size of your home and how far you're moving. Attorney FeesIf you're in an attorney closing state—Delaware, Georgia, New York, Virginia, North Carolina, South Carolina, West Virginia, and Alabama—you'll be required to have a lawyer oversee the sale of your home. “During this process, the attorney that's representing the seller prepares the purchase contract and then the buyer's attorney goes back and forth with the seller's attorney to review it and align on the language for the contract,” Antin explains.Related StoryFAQs on the Costs of Selling a Homespawns//Getty ImagesWhat will I pay when I sell my house?According to Krimmel, most money that comes out of the seller's pockets is paid from money made in the sale, rather than costs to pay up front. “Realtor commissionsand closing costssuch as title insurance, escrow fees, transfer taxes, and repairs to prep for listing, such as painting, landscaping, and deferred maintenance, are all examples of costs that the seller is responsible for.”Do sellers pay any closing costs?Other than commission rates, Antin explains that most traditional closing costs fall on the home buyer, not the seller. The seller will pay the commission rates, any taxes owed, and the remainder of their mortgage. What is a common mistake people make when selling a home?“One big mistake is mispricing the home,” says Krimmel. “Overpricing can lead to the home sitting on the market, price cuts, and ultimately selling for less than if it were priced correctly from the start. Why? Because if a home sits on the market for too long and/or the seller keeps dropping the price, buyers will assume something is wrong with the home. Plus, as the home sits unsold, the buyer still has to pay their normal mortgage, taxes, utilities, etc. Even if the home is unoccupied.” Follow House Beautiful on Instagram and TikTok.Expert consulted:Jared AntinReal Estate BrokerJared Antin has built a distinguished career in the real estate industry, excelling in both development and brokerage roles. Rising quickly from a successful agent to Managing Director at Elegran Real Estate, he has been recognized as one of NYC’s “Rising Stars” by Crain’s. As a member of Elegran’s executive leadership team, Jared drives strategy, fosters innovation, and leads the firm’s growth while maintaining its collaborative culture. He is passionate about supporting agents and strengthening relationships within the team and the real estate community.
#how #much #costs #sell #home
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