How much does it cost to sell a house?
Run your own calculations here
Run your own calculations here
If you need a quick rule of thumb, it is about 10%. So, if you sell your home at $500,000, expect to receive back $450,000. Now, some conditions may reduce your returns, while there are ways to improve them. Let's look into that in greater detail in this article.
Real Estate Agent Commissions (~5-6%)
Many home sellers know and fixate, and rightly so, on the sale's most costly ticket item, the real estate agents. To effectively sell your investment, 6% is typically required. In higher-priced markets, 5% may be acceptable. Those who go any lower are likely to compromise on the products they provide for you.
However, there are other costs for which the owner is responsible before selling the house.
Staging and other prep work costs (~1% of the sale price)
If the sale price is dependent on the size of your house, staging a bigger house will cost you more in time and money. Staging is one of the key factors attracting buyers to a higher selling price and getting the house sold.
Landscaping costs (~1% of the sale price)
Depending on your yard's size and complexity to make it attractive for sale, landscaping will cost you time and money. Proper landscaping is necessary for a reasonable sale.
Seller Concessions (~1-2% of the sale price)
Today's buyers want to feel that they got a good deal for the house. It means that even when you list your house at market rate, you may need to reduce your selling price to satisfy the buyer. Satisfied buyers close on the house, while others may look elsewhere after having wasted your time. The buyer may also be restricted by their loan limits and may request that you help him/her to close on your house.
Home transition and overlap costs (~0-1% of the sale price)
Depending on the size of your home, your contents can be considerable. While selling your home and seeking a new place to live, you may end up having to move to a temporary place for some time. That would require double moves and storage costs.
Closing costs (~1% of the sale price)
Closing costs are fees that you pay at the end of your selling transaction to satisfy the government and the lender(s). Buyers would have additional closing costs to protect themselves from their purchase, such as appraisals, home inspection, and title searches.
For the seller, your closing costs would be less. Closing costs may include transfer tax, mansion tax, taxes to the municipality of the home, recording fees, attorney fees (if applicable), and mortgage pay off fee (if applicable),
Home Repairs (varies)
Today's buyers want to move into a house that is ready for them to occupy. They will certainly pay for an inspection, and they will haggle to get everything in your house repaired before they close on your house. If you have any severe problems, the house may not even be sellable.
Tax Implications
Excluded in this list are the tax implications of your sale. Speak to your accountant to understand the ramification of your sale. Our handpicked accountants can be found here.
Run your own calculations here
