How Much Does Selling a House Cost? (Oct 2021)

By Kristen Kish

|10 min read

If you’re looking to sell your house, you probably have a lot of questions. How do you find and hire a real estate agent? What are the fees for selling a house? Most importantly, what is the cost of selling a house and what do you have to know before you start? Let’s break it down.

Cost of Selling a House With a Realtor?

The first thing to think about is hiring help. Real Estate Agents work on commission and that is something you can negotiate at the beginning of a working partnership. 

The average closing cost of working with a real estate agent is 6% of the home’s final selling price. This fee is split between the seller’s and buyer’s agents.

The process of selling your house yourself is called FSBO or “For Sale By Owner.” It may sound like you’re cheating the system, but it’s easy to miss things if you aren’t experienced. 

While you won’t end up having to pay a commission fee to a seller’s agent by selling yourself, in the end you may make less than you were hoping for. Oftentimes interested buyers will take advantage of someone selling their own home since they know they likely aren’t well versed in the process.This is especially true if this is your first time selling a house.

If you choose to go down the FSBO path, there will still be costs involved. For example, as a seller, you’ll still have to pay to have your home listed on the MLS (Multiple Listing Sites) and MLS-powered sites such as Zillow, OpenDoor, etc. (When listing your house as FSBO, using Zillow will not cost you a dime, as there are no fees to list with them. With OpenDoor, there is a 5% service fee. Each MLS site is different.) 

Not to mention online marketing, hosting open houses, as well as all the normal fees associated with selling a home, but we’ll dive into that later.

In short, the difference between the cost of selling a house while using a real estate agent vs. FSBO isn’t much, but with a realtor, you’ll usually end up walking away with more money than you spent.

How much does it cost to sell a House?

What are the fees for selling a house? There might be more than you think. Some of these home selling costs may not apply to you or the county you reside in. But you can expect most of this to end up on your final bill. As you think about listing your home, consider these fees you can expect to be included in the total cost of selling a house:

Buyer’s Agent Fees

It’s a regular practice for a seller to also pay a commission to the buying agent. While it isn’t a required fee, it’s taboo to offer less than 2.5 to 3% in commission payout. A seller listing their home as FSBO can negotiate the buyer’s agent fee, but is not contractually obligated to pay anything. The buyer’s agent will sometimes try to negotiate a fee with you before showing their client your home (if it wasn’t listed on a MLS website). If you do list it online, the client may see it first and reach out to you if interested. 

If you are selling with an agent, this fee is usually entered into the MLS listing. This makes this payment contractually obligated, and the listing broker is responsible for seeing that it is paid. However, if you do not pay it yourself, the listing broker will have to foot the bill. This is a rare occurrence, as listing broker’s are protected by the Exclusive Right to Sell Listing Agreement.

Escrow Fees

Escrow is kind of like putting down a deposit. It’s a legal contract that holds the parties involved accountable for paying the funds owed in the final sale. A third party company holds a specific amount of the buyer’s money until the sale has been finalized. 

The escrow fee exists as compensation for the escrow agent. They are responsible for handling the transfer of title and funds. The “escrow process,” is what happens when the home sale is more or less a done deal, but there are still some final boxes to check. 

An escrow fee is sometimes split between the buyer and the seller and sometimes handled by just one. If you end up being responsible you can expect a cost of about 1-2% of the house’s final sale price.

Notary Fees

A legal requirement: the notary fee is required to verify the identity of the seller as well as properly distribute legal documents to those involved.

Natural Hazard Disclosure Report

This is a disclosure that informs the buyer of any natural hazards they could potentially face when living in a home such as brush fires, earthquakes, and flooding. It can also be smaller, uncontrolled disturbances such as living near a highway, an airport, or the like. The Natural Hazard Disclosure Report will cost the seller an average of $125.

Termite Inspection Cost

A termite inspection fee can be required depending on your home’s condition and location. If your home’s foundation is very old and hasn’t seen an update in a while, the buyer’s agent may ask for a termite inspection on behalf of the buyer. 

A termite inspection in the home usually costs $100. If the home is in dire need of repair and extermination, this can cost anywhere between $1,000 and $5,000 when all is said and done. This includes damage done by termites in the past or exterminating termites active in the home at the time of inspection.

Mortgage Balance Payoff

Before you can be paid for the sale of the house, the remaining amount owed on your mortgage must be paid to your mortgage lender. The mortgage balance payoff is the repayment of your home loan. In some instances, this can include a loan payoff fee, as well as any other fees listed in your original agreement.

City or County Transfer Fees

The city or county tax for changing the ownership of a real estate property. This cost varies by location and in some cases, there is no cost at all.

Lien Release Document Fees

Lien Release fees only apply to sellers with debts such as incomplete mortgage payments, debts owed to contractors, etc. If a court ruling resulted in a lien on your home then you’ll have to pay it off before your home can sell. You will also need a lien release document as proof that you have repaid your debts. A recording fee is required to be paid for your document to be valid.

Title Search Fees

A title search document proves you’re legally able to sell your home. 

This can cost you anywhere between $250 and $800 depending on your county of residence.

Cost of Home Warranty

A home warranty is used to replace and repair things like plumbing, air conditioning, and major appliances that need work.

It should be noted that a home warranty is completely optional. However, without one, you may end up spending a lot of money out of pocket to cover the cost of repairs. 

A home warranty can cost a seller anywhere from $250 to $1,000. Which can be steep, but it’s a necessary cost when selling a house.

HOA Transfer Fee

An HOA transfer fee may be applicable if your home has an HOA or Homeowners Association. This is paid for by the seller and will include a fee to properly register the buyer as the new homeowner. The HOA transfer fee typically runs about $1,000 or less.

Closing Costs

Sometimes, the buyer’s agent will negotiate with the seller’s agent to have the seller cover closing costs of selling a home. In some instances, this can be a make or break for the interested buyer, which is why the seller may choose to agree.

Closing costs can cost up to $1,000 or more in loan underwriting fees. This would include a home inspection, the appraisal, and title work. As for lender fees, you’ll pay up to 1% to 2% of the loan amount.

Closing costs paid for by the seller are about 2-5% of the final sale price.

If you’re not sure if these fees apply to your situation, be sure to reach out to your real estate agent. They’re your go-to source for any questions you need to be answered about the cost of selling a house.

The Bottom Line

Navigating the cost of selling a house for the first time can be tricky. There’s a lot to take into consideration before you start the process. Budgeting your finances and taking note of the required fees for selling a house is a good start. 

It may be very tempting to take matters into your own hands with FSBO. Yes, selling your house via FSBO may get your home sold faster, especially if you have a buyer lined up. It’s important to remember that most agents know all of the ins and outs of the real estate market they work in and can help you navigate it. Going on your own always ends up costing more money and time than you think. If you have general real estate questions, submit them here or message one of our top agents directly.

Research the costs of selling a house in your city and hire a top real estate agent in your area!

Kristen Kish

[email protected]

Kristen is the Content Marketing Manager for FastExpert Inc. She has been writing professionally for 4 years and knows the Real Estate market like the back of her hand. She's obsessed with dogs and all things Disney related.

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