How Much Does it Cost to Sell a House

Real Estate Agent with RE/MAX Executive Realty 91362

What Fees Do Sellers Pay to Sell a Home?

When selling a home, you shouldn't overlook the closing costs involved. Buyers and sellers both have to pay closing costs, but the amounts will vary between buyers and sellers.

The closing costs you will have to pay are going to vary based on your local situation, among other things. There are different taxation rules, title transfer costs, and settlement fees in different states. For example, sometimes, the cost of transferring the title is free, whereas it can cost thousands in another state.

We're going to take a look at the closing costs for sellers you can expect to pay. Maximum Real Estate Exposure has a very in-depth review, which you should absolutely take a look at. Below you'll find a summary of some of the necessary closing cost information any seller should have at their disposal before putting their home up for sale.

Surprises are not fun when it comes to your wallet or pocketbook. Many sellers find themselves at a closing, never understanding some of the fees they will be expected to pay. Grab a cup of coffee and get educated on seller closing expenses.

Average Closing Costs For a Seller

Based on a typically priced home of $300,000, you can expect to pay between $24,000 and $30,000, or 8 to 10 percent of the sales price. This cost will come from multiple sources; let's take a closer look at all of the potential costs of selling a home.

Real Estate Commissions

As a seller, you are going to have to pay the listing agent who helped sell your house. This is generally around 2.5-3 percent of the sale price, but you also have to pay the buyer's agent another 2.5-3 percent as well. Real Estate commission is typically split fifty-fifty with the listing agency and selling agency.

It is possible to negotiate this down a little, ask your agent if you can get a reduction when you are looking to list your property for sale. If you are using them as a buying agent for your new home, this will give you more leverage since they are going to get two commissions from you. It is not unusual at all for a real estate agent to discount their fees when you are doing multiple transactions with them.

Another option that has become more popular in recent years is what's referred to as flat fee MLS or entry only. The flat fee MLS arrangement is when a real estate company lists your home in the multiple listing service but performs no other marketing activities. The thought process around this is that you'll have the luxury of getting your home in the MLS. The MLS provides access to hundreds of thousands of buyers, letting them know your home for sale.

Of course, there are some significant downsides to using this approach as there are significantly more things that go into selling a home than just putting in the MLS. You can see the pros and cons of flat fee MLS in the article found right here at Active Rain.

Real Estate Transfer Taxes

There are taxes to pay when transferring the title to the buyer. The amount due varies significantly between states; at the low end, it may cost less than $50, but in some states, it will run into the thousands. For example, California and Massachusetts have significant tax fees for selling your home. If there are going to be any surprises at closing on what a seller is expected to pay, this is where it most often occurs.

One of the things every real estate agent should be educating their clients on is the closing costs they will be expected to pay. Unfortunately, many agents don't, and sellers end up being extremely disappointed.

Pro-Rated Real Estate Taxes

You will need to pay property taxes as well. You will likely be responsible for the taxes due on the property up to that you close on your property. This is done on a prorated basis and will be more if you are further away from the previous time they fell due. Your real estate attorney or title company should be reviewing these figures with you in advance of your closing.

Sometimes these costs are not totally accurate at closing and the seller will be expected to make up the difference if an error is found after closing.

Title Insurance

It usually falls to the buyer to pay for title insurance. This protects the buyer from legal expenses due to disputes over the title of the property. There are some rare occasions where a seller will be asked to cover a portion of the title insurance. This is something that should be discussed up-front as it can be a relatively high expense.

Escrow Costs

In some states, but not all, there are fees with managing escrow accounts. Escrow accounts are essential to make sure everybody's money is secure until contracts are signed. The providers of these accounts will typically charge 1 percent of the sale price or a flat fee, which can be anything up to several thousand dollars. They are also likely to charge fees for transferring money, copying documents, and any other expenses they may have.

This cost isn't going to be all on the seller, however, with it normally being split with the buyer. In many states, the earnest money is held by the seller's real estate company and is duly accounted for at the time of closing. In this circumstance, there is rarely any charge for the brokerage holding the money.

Buyers and sellers often confuse the earnest money with the buyer's down payment. These are two very different things, as the earnest money secures the transaction while the down payment is the difference between the mortgage amount and the purchase price.

Other Expenses to Sell a Home

There can still be further things the seller has to cover the cost of in some cases. These are more dependent on your local area and the rules which have to be followed.

  • Attorney Fees - Some states legally require an attorney to be present when a house is sold. Even if you aren't in one of those states, you can still choose to have the help of an attorney, which could be particularly useful if the transaction is complicated.
  • Moving expenses - most people understand how costly moving can be. It can at the drop of a hat suck thousands of dollars from your net. More than likely, you'll be shelling out significant money to a moving company along with a moving tip that many people forget about if they perform up to your expectations. Even when you try to save on costs by renting your own moving truck, it can still be costly.
  • HOA Fees - If your house is located in a homeowner's association, you may have to pay a transfer fee to pass this to the buyer. You will also have to make sure you are fully paid up for the time you've lived in the area.
  • Home inspection costs - at times, sellers may decide to have a home inspection of their property before putting it on the market. By getting an inspection up-front, it can prevent any surprises and allows for a seller to make repairs or improvements to avoid scaring off a buyer away from going forward. The cost of a home inspection will typically range somewhere between $400 and $1000 depending on your area and size of the home.
  • Seller Assistance - When selling under challenging times, it can help to provide buyers with a credit towards their closing costs. Even in a strong seller's housing market, it is not uncommon at all for a buyer to ask for a seller to cover closing costs. What sellers need to remember is their bottom line. As long as you are getting what you want, don't fret over the buyer, asking you to participate in paying some of their costs. This will make your home a more attractive purchase and get you to the closing table - the ultimate goal.
  • Pre-payment penalty - although rare, make sure you don't have to pay any fees for paying off your loan early. Many years ago, pre-payment penalties used to be prevalent. That is no longer the case but worth double-checking.

When Do Closing Costs for Sellers Have to be Paid?

The closing costs that a seller needs to pay are not expected to be paid until the time of closing. These expenses will come out of the proceeds of the sale, so you won't need to get your credit card or checkbook out. A seller will receive what's called a HUD settlement statement that will break out all of the costs a buyer and seller will need to pay.

You should expect to get the settlement statement a couple of days before the closing so that you have time to review it and check for any errors. It is not uncommon at all for a mistake to be found, and the document needing to be revises. Quite often, they are just straightforward errors.

The Real Estate Settlement Procedures Act (RESPA) mandates that lenders send buyers a Good Faith Estimate (GFE) of their expected closing costs within three business days of signing the loan application. The estimate provided should be very close to the final charges. Sellers are also supposed to receive their disclosure in advance of the closing as well.

Final Thoughts on Costs to Sell a Home

Without a doubt, selling a home can be expensive. Not having a firm grasp of the closing costs a seller will be expected to pay can be hazardous to your wallet along with your stress levels. Hopefully, you have found this information on what you can expect to pay for closing expenses.


Posted by

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comments (10)

Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Bill Gassett - this is very good information for buyers and sellers.

Apr 03, 2020 08:34 AM
Bill Gassett

Thanks Grant. Over the years I have found many sellers who have no idea what they will be expected to pay in closing costs. This is almost always the case with first time home sellers.

Apr 03, 2020 08:45 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Bill Gassett hope you're staying healthy and safe.... buyers are out there and are ready to buy.... and I wish more sellers wanted to sell, at this time....  good information here for sellers .... buyers are ready to jump.... good time to list....

Apr 03, 2020 09:49 AM
Bill Gassett

Strange times we are in for sure Barbara. This year will go down in history as one of the worst on record. I think we will see a decent spurt in selling activity once we are able to resume our lives but all bets are off after that.

Apr 03, 2020 10:06 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Great summary, Bill. Lots of sellers, especially first timers, are not clued into all the costs they can expect. Any respectable listing agent will be prepared to review this, perhaps even before the question comes up.


Apr 03, 2020 01:14 PM
Bill Gassett

I agree with you wholeheartedly Jeff. Over the years I have found many sellers who were not clued into what the closing costs would be.

Apr 03, 2020 01:56 PM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
Relocation to NW AZ with elbow room & more freedom

Bill Gassett - So appreciate your breaking this down as it can be very helpful. Chicago Title has a great app that breaks down closing costs. Even though it is based on national averages, it does provide some quick guidance.

Apr 03, 2020 02:24 PM
Bill Gassett

Leanne I am glad you found the tips on the costs to sell a home useful.

Apr 04, 2020 08:06 AM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

I'm optimistic, yet also pragmatic about the soon to be recovery of our economy, however, consumers IMO  will be slow to spend large sums on big ticket items anytime soon until convinced the economy has stabilized. With over 10m unemployed consumers, getting going will be very challenging. That said, I've always used 3% of sale price as an estimate of seller's closing costs, so your post is very informative. 

Apr 03, 2020 09:04 PM
M.C. Dwyer

Did you mean to type 3% Kimo Jarrett ?    I usually tell people to plan on 8% in California, to account for all the transfer costs from title, escrow, recording fees, transfer taxes, and realtor fees.     Plus  if it's not their primary residence they need to plan on another 3-4% state tax withholding.

Apr 05, 2020 10:33 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

It will be interesting for sure Kimo Jarrett - my best guess is we will have a flurry of activity and then things will slow considerably. How will it not with millions of people out of work and the stock market in shambles? Anyone who thinks these things are not going to have an impact on the housing market has their head in the sand. Thankfully, most places have low inventory or we would really be up a creek!

I am glad you enjoyed the advice on what sellers pay for closing costs.

Apr 04, 2020 08:06 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     The unforeseen - my Seller had to replace the roof.  Cost = $12,000

    The buyer's Florida insurance company wouldn't issue a policy because the roof was 16+ years old.  Seller called her insurance company; they refused to transfer the existing policy for the same reason.

       "What if I reject this offer, and wait for another buyer?" she asked me.  "The same thing will happen again.  Replace the roof, please."  She did.


Apr 04, 2020 08:55 AM
Bill Gassett

Those unforeseen selling costs are always the worst Fred.

Apr 05, 2020 05:06 AM
M.C. Dwyer
Melody Russell Team at eXp Realty of California, Inc. - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Great primer for sellers to review - nice job - very thorough!

Personally, I feel like using an MLS entry only service is a huge mistake in the current market.    We have a couple of those MLS entry only listings in my area: my concern is the sellers may not even know they are presently forbidden from letting anyone into their occupied homes.   

We have several new forms addressing the Coronavirus- and without a realtor on your side to explain the pros and cons to a seller - these essentially unrepresented sellers may be signing away some of their rights without really understanding.     In any market, sellers won't get help with their disclosures from most of these MLS entry only listing services - and I've personally encountered sellers who quickly realized they were way out of their league trying to understand their transaction, but found themselves bound by a 6 month [or longer!] listing agreement.


As you aluded to, in California, if the property being sold is not their primary residence, sellers need to plan on 3-4% tax withholding depending on the area.

Apr 05, 2020 10:41 AM
Bill Gassett

People that move from other states are the ones who typically do not know the seller's closing costs. The other of course is when they are selling for the first time and someone has not educated them on the expenses involved with selling beyond the commission.

Apr 05, 2020 02:12 PM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

A great post!  Thank you for sharing!  So many questions.

Apr 06, 2020 08:41 AM
Bill Gassett

Thanks Diana Dahlberg - so many sellers have no idea what the closing costs will be for the sale of their home.

Apr 13, 2020 10:38 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent post for anyone looking to buy or sell a home!  Your posts are always very thorough, answering every detail! 

Apr 13, 2020 10:36 AM
Bill Gassett

I appreciate the comps Jan Green many owners have no idea what the seller's closing costs are especially if it is their first time selling.

Apr 13, 2020 10:38 AM