How Much Does It Really Cost to Sell a Home?
- Aaron Carr
- Oct 31, 2024
- 10 min read
Updated: Feb 27
Selling a home is a major financial decision, and while many sellers focus on potential profits, the costs of selling can be a surprise. From real estate commissions to closing fees, there are various expenses along the way. To help you prepare, we’ve outlined the main costs associated with selling a home.
This list outlines the most significant costs that homeowners in Nevada should expect when selling a property. It breaks down each expense category, providing insights into essential aspects like paying off the remaining mortgage, real estate agent commissions, and closing costs. It also covers optional but potentially impactful costs, such as home staging and marketing, as well as other fees like buyer concessions, repairs, and miscellaneous costs. Together, these elements represent the financial considerations a seller will encounter throughout the home-selling process.
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1. Mortgage Payoff
When selling a house, the mortgage payoff is typically the largest portion of where the funds from the sale will go. This involves settling the outstanding debt on the property, including the principal balance, any accrued interest, and potential fees associated with closing the mortgage account. Here’s a deeper dive into the key aspects:
What is Principal Balance
The principal balance is the remaining amount of the original loan that has not yet been paid. This figure will depend on the size of the original loan and how much of it has been paid off through monthly payments over the life of the mortgage.
What is Accrued Interest
Interest on your mortgage accrues daily. When you sell your home, you’ll need to pay the interest accrued up to the date of the sale. This is typically calculated by your lender and included in the final payoff amount.
Things to look out for: Early Payoff Fees or Penalties
Some mortgage agreements include early payoff penalties, often referred to as prepayment penalties. These fees are designed to compensate lenders for the loss of future interest payments if the loan is paid off before the end of its term. If your loan has such a clause, this cost will also be part of your mortgage payoff.
2. Real Estate Agent Commissions
Real estate agent commissions are typically one of the largest costs associated with selling a home, second only to the mortgage payoff. These fees compensate the real estate professionals who assist in marketing your property, negotiating with buyers, and managing the transaction. Here’s a detailed breakdown:
How Commissions Are Structured
Percentage of Sale Price: Commissions are usually calculated as a percentage of the final sale price of the home, often around 5-6% in total.
For example, on a $400,000 home, the total commission might range between $20,000 and $24,000.
This percentage is usually agreed upon when signing a listing agreement with your real estate agent.
Split Between Agents: The total commission is generally split between the seller's agent (also called the listing agent) and the buyer's agent, with each typically receiving half of the total fee.
Using the $20,000 example, each agent would receive $10,000 before deducting their brokerage fees or other costs.
What You’re Paying For?
Real estate agents perform numerous tasks that justify their commission, including:
Pricing Expertise: Helping you set a competitive price for your home based on market trends and comparable properties.
Marketing Your Home: Agents create a marketing strategy that may include professional photography, listing on the MLS (Multiple Listing Service), hosting open houses, and running online ads.
Managing Offers and Negotiations: Agents handle offers, counteroffers, and negotiations to secure the best deal for you.
Handling Paperwork: Ensuring all contracts, disclosures, and legal documents are properly prepared and submitted.
Navigating the Closing Process: Guiding you through the inspection, appraisal, and final closing procedures.
Why Real Estate Agent Commissions Are Worth It
Although commissions can feel substantial, they’re often justified by the value that experienced agents bring to the table. According to studies, homes sold with the help of a real estate agent often sell faster and for a higher price compared to homes sold by owners themselves. The agent’s ability to maximize your sale price can more than offset the commission cost.
The Bottom Line
While real estate agent commissions represent a significant expense, they are an investment in achieving a smooth sale process and maximizing your home’s value. Understanding the services provided and the structure of these fees can help you make informed decisions and choose the right agent for your needs.
2% Listing Fee Option: At 2% Listings, we believe sellers shouldn’t have to sacrifice their hard-earned equity to pay high fees. With our low 2% listing fee, you’ll save thousands compared to the traditional commission model. And with our top-rated agents, you get full-service support without compromising on quality.
3. Closing Costs
Closing costs are the fees and expenses that sellers incur to finalize the sale of their home. While often overshadowed by the mortgage payoff and real estate agent commissions, closing costs typically account for 1-3% of the home’s sale price and can add up to a significant amount. Here’s a detailed breakdown:
What Are Closing Costs?
Closing costs include a variety of charges that cover the administrative, legal, and financial aspects of transferring ownership of the property to the buyer. These costs are typically deducted from the sale proceeds and paid at the closing table.
Key Components of Closing Costs for Sellers
Title Insurance (Owner's Policy)
In Nevada, it is customary for sellers to pay for the owner’s title insurance policy, which protects the buyer against potential legal disputes over property ownership.
This cost can range from $1,000 to $3,000, depending on the home’s sale price.
Title insurance ensures that the buyer receives clear ownership of the property.
Escrow Fees
Escrow companies or title companies facilitate the closing process, holding funds in a neutral account and distributing them appropriately.
These fees, often split between the buyer and seller, typically range from $500 to $1,500, depending on the complexity of the transaction.
Real Property Transfer Tax
Nevada imposes a real property transfer tax when ownership changes hands.
The rate is $1.95 per $500 of the property’s value, or approximately 0.39% of the sale price.
For example, on a $400,000 home, the transfer tax would be $1,560.
Prorated Property Taxes
Property taxes in Nevada are paid semi-annually or annually. Sellers are typically responsible for covering taxes up to the date of closing.
The exact amount will vary based on your property’s assessed value and the timing of the sale.
Recording Fees
Local governments charge fees for recording the deed and other legal documents with the county. These fees are generally modest, ranging from $50 to $200.
HOA Transfer Fees and Dues
If your property is part of a homeowner’s association (HOA), there may be transfer fees charged by the HOA to process the sale.
Additionally, sellers are responsible for paying HOA dues up to the closing date, which can range from a few hundred to several thousand dollars depending on the HOA’s policies.
Attorney Fees (Optional)
While not required in Nevada, some sellers hire real estate attorneys to review contracts or manage complex transactions. Fees for these services can vary but typically range from $500 to $1,500.
Who Pays What?
While sellers typically handle the costs outlined above, some expenses, like escrow fees, may be split between the buyer and seller. It’s important to review the purchase agreement, as certain costs are negotiable and can be shifted depending on the terms of the sale.
Negotiable Closing Costs
In some cases, sellers may offer closing cost credits or concessions to buyers, especially in competitive or buyer-friendly markets. These incentives can include:
Covering a portion of the buyer’s closing costs.
Offering prepaid fees for services like inspections or home warranties.
How Sellers Can Prepare for Closing Costs
Get an Estimated Net Sheet: Your real estate agent or escrow officer can provide a net sheet, which outlines expected costs and calculates your net proceeds.
Review Title Reports: Ensure there are no unexpected liens or issues with the title that could add additional costs or delays.
Budget for Transfer Taxes: Factor in the real property transfer tax as it is non-negotiable in Nevada.
The Bottom Line
While closing costs may not be as substantial as the mortgage payoff or agent commissions, they are still an important part of the home-selling process. Understanding these fees and preparing for them can help you avoid surprises at the closing table and ensure a smooth transaction. By planning ahead and negotiating when possible, sellers can effectively manage their closing costs and maximize their net proceeds.
⚖️ Want to find out exactly how much you will owe? Check out our Closing Cost Calculator
4. Repairs and Concessions
Repairs and concessions are important cost considerations when selling a home, as they directly impact the seller’s bottom line and can make or break a deal. These costs typically arise during the negotiation process, especially after the home inspection, and can vary significantly depending on the property’s condition and the buyer's demands.
Repairs
Repairs involve fixing issues in the home to meet the buyer’s expectations or to comply with local safety and building codes. These costs can be minor or substantial, depending on the condition of the property.
Pre-Listing Repairs
Many sellers choose to address obvious issues before listing their home, such as:
Cosmetic Improvements: Fixing paint, flooring, or outdated fixtures to make the home more appealing.
Functional Repairs: Addressing plumbing leaks, broken windows, or HVAC issues.
Focus: Investing in pre-listing repairs can reduce the likelihood of buyers requesting additional fixes and can make your home more competitive.
Repairs After Inspection
After a buyer conducts a home inspection, they may request repairs for issues that were uncovered. Common repair requests include:
Fixing roof leaks.
Repairing electrical or plumbing systems.
Addressing foundation cracks or structural issues.
Focus: Sellers can agree to these requests, negotiate a reduced scope of repairs, or offer a financial concession in lieu of repairs.
How to Manage Repairs Concessions Concessions are financial incentives that sellers offer to buyers to help close the deal. These are often requested in lieu of repairs or to make the home more affordable for the buyer. The Bottom Line Repairs and concessions are negotiable aspects of the home-selling process but can represent a significant cost. Sellers should carefully evaluate repair requests and strategically offer concessions to balance closing the deal with protecting their financial interests. Planning ahead and working closely with your real estate agent can help you manage these costs effectively and ensure a successful sale.
Get Ahead of Inspections: Consider conducting a pre-inspection to identify and address issues proactively.
Set Limits: During negotiations, establish a cap on repair costs to avoid excessive financial burdens.
Evaluate ROI: Only invest in repairs that will add value or prevent a deal from falling through.
5. Staging and Marketing
Staging and marketing are critical components of the home-selling process, as they directly impact the property’s appeal, visibility, and ultimately, the final sale price. While these efforts represent additional costs, they often yield a high return on investment by attracting more buyers and potentially leading to faster sales at higher prices.
Our Realtors cover all the cost associated with Staging and Marketing to promote your house! Another way 2percent-listing.com will save you money!
Staging Your Home
Staging involves preparing your home to look its best for prospective buyers. This can range from basic decluttering and depersonalization to hiring professional staging companies to furnish and decorate the space.
Types of Staging
DIY Staging: Decluttering, deep cleaning, rearranging furniture, and making minor repairs on your own to create a welcoming atmosphere.
Professional Staging: Hiring a professional stager to design and furnish your home to highlight its best features and make it more appealing to buyers.
Virtual Staging: Digital editing of photos to add or enhance furnishings, an affordable alternative to physical staging.
Costs of Staging
DIY Staging: Minimal costs (cleaning supplies, minor updates).
Professional Staging: Typically costs between $500 to $2,000+, depending on the size of the home and the extent of staging required.
Virtual Staging: Costs average $100 to $300 per room.
Benefits of Staging
Enhances Visual Appeal: A staged home photographs better and makes a stronger first impression online.
Helps Buyers Visualize: Staging helps potential buyers envision themselves living in the space, which can increase emotional attachment and offers.
Faster Sales and Higher Prices: Staged homes often sell faster and for more money than unstaged properties.
Marketing Your Home
Effective marketing ensures that your home reaches as many potential buyers as possible, leveraging various channels to showcase its value and attract interest.
Photography and Videography
Professional Photography: High-quality photos are essential for online listings. Costs range from $150 to $500, depending on the size of the home and the number of photos.
Video Tours and Drone Footage: These modern marketing tools provide buyers with an immersive view of the property. Video tours typically cost $300 to $1,000, while drone footage adds $100 to $500.
Online Listings
Most buyers begin their search online, so having a standout listing on platforms like Zillow, Realtor.com, and the MLS (Multiple Listing Service) is crucial.
Ensure the listing includes:
High-quality photos.
A compelling description highlighting the home’s features.
Accurate details about the property (square footage, location, amenities).
Social Media Advertising
Platforms like Facebook, Instagram, and LinkedIn can be used to target specific buyer demographics.
Paid social media campaigns typically cost $100 to $500+, depending on the reach and duration of the ads.
Print Materials
Flyers, brochures, and postcards can complement online marketing efforts, especially for open houses and local outreach.
Costs range from $50 to $300, depending on the quantity and quality of materials.
Open Houses and Events How to Maximize the ROI on Staging and Marketing
Hosting open houses allows potential buyers to tour the home and visualize themselves living there.
Costs may include refreshments, additional cleaning, or hiring a staging team to refresh the home before the event.
6. Miscellaneous Costs
There are numerous possible miscellaneous costs sellers might encounter during the home-selling process, but these are some of the most common ones to be aware of. While individually small, these costs can add up and impact your final net proceeds. It’s crucial to budget for them to avoid surprises at closing.
1. Home Warranty for Buyer
Cost: $300–$600.
Often offered as a buyer incentive, a home warranty provides peace of mind and can help close the deal.
2. Utilities and HOA Fees
Cost: Varies; includes prorated utility bills up to the closing date and any HOA transfer fees or dues.
Ensure all accounts are current to prevent delays.
3. Recording Fees
Cost: $50–$200.
Covers the county’s charges for recording the deed and finalizing the transfer of ownership.
4. Cleaning and Maintenance
Cost: $150–$500 for cleaning; landscaping or minor fixes may add to the total.
Keeping your home in pristine condition enhances buyer appeal.
5. Moving Costs
Cost: $500–$2,000+, depending on the distance and scope of services.
Don’t overlook this essential post-sale expense.
6. Legal and Tax Preparation Fees
Cost: $500–$1,500.
Optional but helpful for sellers dealing with complex transactions or capital gains tax considerations.
If you’d like to know the exact costs you might incur during your home sale, contact one of our top local agents today. They’ll provide a detailed breakdown tailored to your property and guide you through the process seamlessly.
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Selling a home doesn’t have to be complicated—or expensive. At 2% Listings, we believe in offering a cost-effective, full-service experience that takes the stress out of selling. Contact us today to learn more about how our 2% listing fee can make selling your home simple and affordable.
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