Eight hundred forty-two thousand homes were sold in the U.S. in 2020. While somewhat common, the process of selling a home is not a simple task. It requires plenty of time and energy, and it costs money. If you’re selling a house, it’s essential to prepare yourself for the process and the costs that go along with it. It can be a considerable undertaking, and you don’t want to be left with any unfortunate surprises. What is the average cost to sell a house? Please read our guide for everything you need to know.
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Real Estate Commission
As far as home selling fees, real estate commission is usually the biggest one, at five to six percent of the sale price. If you sell your house for $300,000, you could end up paying almost $18,000 to your real estate agent.
You could avoid paying commission by selling your house for cash, like with this company, or listing your home as for-sale-by-owner (FSBO). If you choose to go the FSBO route, expect to assume all of a real estate agent’s duties, such as showing your home yourself, negotiating, hiring a lawyer, and completing all of the necessary paperwork.
Home Repairs
When wondering how to sell a house quickly, it’s essential to consider making home repairs.
Most likely, there are things you could improve in your home to enhance its appeal and potentially raise its value. Think minor cosmetic work, such as painting, landscaping, and simple upgrades.
If you notice something that needs repairing, most likely the potential buyers and home inspectors will also. It’s best to take care of any issues before putting your house on the market to save yourself the stress later.
Pre-Sale Home Inspection
Some sellers decide to undergo a pre-sale home inspection to prepare themselves for structural or mechanical problems before a potential buyer comes in with their home inspector.
The process is entirely optional but could cost around $400 should you choose to hire an inspector.
Mortgage Payoff
When you sell your home, the sale proceeds will automatically go towards paying off your mortgage. The payoff amount may be slightly less than what you owe, and you’ll likely have to include the prorated interest that you’ve accrued to the total payoff.
You may also need to pay a prepayment penalty. This standard fee is usually added when paying off your mortgage sooner than when the total was due.
Additional Closing Costs
Some additional closing costs may include HOA fees, attorney fees, property taxes, transfer taxes, and title insurance. There may also be a brokerage, escrow, and courier fees that you’ll need to take care of.
These costs may differ depending on where you live and if it’s a seller’s or buyer’s market. Check with your real estate agent for the closing costs you should expect in your area.
Capital Gains Tax
If you sell your home for more than you paid for it, you could be responsible for paying a capital gains tax. It depends on home selling prices, but if you made more than $250,000 profit on the sale of your house, you’d most likely need to report it on your tax return.
Be Prepared For the Average Cost To Sell a House
If you plan on selling your home, it’s essential to prepare yourself for the extra costs and fees you may be responsible for.
While the average cost to sell a house differs for everyone, you can expect to pay between eight and ten percent of your total sale price. Don’t be afraid to negotiate. Shop around for a realtor who can help keep your costs low.
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