Selling a home can be costly. Total expenses depend on the property’s location, sale price, market conditions, and deal terms. Although sellers often receive a large payout, much of the proceeds go to transaction-related expenses.

Sellers often focus on the sale price, but ignoring other costs can lead to unrealistic expectations. Usual expenses include agent commissions, attorney fees, closing costs, repairs, staging, and taxes.

Upfront Costs Sellers Often Overlook

Sellers usually focus on their net gain but are often surprised by upfront costs.

Real estate agent commissions

A main home sale expense is the real estate agent's commission. Traditionally, sellers pay both their own and the buyer’s agent. However, commissions are now negotiable, and each side may pay its own agent.

Many sellers still cover the buyer’s agent commission to attract more buyers and speed the sale. Commissions typically range from 2.5% to 3% per agent but can be negotiated, especially for higher-priced homes.

Home inspection costs

Buyers usually pay for inspections. Sellers who want a smoother process often order their own inspections to spot and fix issues early, avoid surprises, and support their asking price.

Home repairs and staging

Sellers often make repairs and improvements to appeal to buyers. Costs vary but often include:

• Structural or cosmetic repairs are needed to pass inspection
• Painting, landscaping, or deep cleaning to improve curb appeal
• Hiring a professional home stager to present the home attractively

Despite adding upfront costs, these improvements often help the home sell faster and at a better price.

Offering incentives to buyers

In hot markets, homes may get multiple offers without incentives. In slower markets, incentives attract more buyers.

Common buyer incentives include:

• Covering part or all of the buyer’s closing costs
• Offering seller-paid mortgage points to reduce the buyer’s interest rate
• Including appliances or furniture in the sale
• Paying for upgrades such as a new roof, windows, or HVAC system

These incentives reduce the seller’s proceeds but often speed up the sale.

Ongoing Expenses During the Selling Process

Sellers also face ongoing costs throughout the selling process.

Paying off the mortgage

Before closing, sellers pay off any remaining mortgage. The lender’s payoff statement shows what's owed. The payoff, including interest and fees, is deducted from the seller’s proceeds at closing.

Closing costs

While buyers typically cover most closing costs, sellers are still responsible for certain fees, which may include:

• Transfer taxes
• Escrow fees
• Title search and title insurance fees
• Real estate attorney fees

Sometimes sellers agree to cover some of the buyer's closing costs, further reducing net proceeds.

Taxes

Taxes are another major expense for sellers.

• Property taxes: Sellers usually pay a prorated portion of property taxes up to the closing date.
• Transfer taxes: These taxes apply when ownership of the property changes and are calculated as a percentage of the sale price.
• Capital gains taxes: Sellers may owe federal capital gains tax if the home sells for significantly more than the purchase price, although exclusions may apply for primary residences.

How Much You Actually Net From the Sale

To estimate your net proceeds, start by determining your home’s market value based on recent sales, local trends, and condition.

Next, subtract all related expenses, such as agent commissions, repairs, staging, incentives, mortgage payoff, taxes, and closing costs. Review the settlement statement at closing for a fee breakdown.

This remaining amount is your net proceeds—your profit after all obligations are paid.

Takeaway

Selling a home involves more than setting a price. Commissions, repairs, staging, incentives, mortgage payoff, fees, and taxes all affect your net proceeds. By anticipating these costs and your home’s value, you gain a better sense of your final profit and avoid closing surprises.