Here’s How Much Money You’ll Keep After Selling a House

“Contacting a local agent in your market is the most effective way of finding a true market evaluation,” says Marissa Papa, a Connecticut real estate agent with over 20 years of experience. “It’s a very prudent part of the process as an experienced agent can provide a comparative market analysis.”

Another option is for sellers to get a pre-listing appraisal, although it’s not required and comes with additional costs. Additionally, an agent who is knowledgeable about trends in your zip code will rely on the same factors of analysis as an appraiser, Papa says.

Sellers who want to get a pre-listing appraisal anyway should prepare to spend between $300 and $600.

While working with a seasoned agent is a crucial first step, doing your own online research to get an estimated value is a great way to kick off the home selling process. With home values nationwide seeing significant annual growth, it’s good to keep track of where things stand for your own property.

How much money will you keep after selling your house?

In addition to the sale price, there’s a sizable list of factors that affect how much money you’ll net at closing. Here are some of the most common ones:

• Mortgage balance pay-off amount
• Agent commission
• Method of selling (For Sale By Owner, cash offers, or iBuyer)
• Cost of repairs or improvements
• Total concessions or buyer incentives
• Closing costs, including state and local taxes and fees
• Staging
• Moving expenses

Depending on whether you have a mortgage and how much balance is remaining, this item will likely be the single largest deduction from the sale price. If you don’t have a mortgage, your proceeds can be generally calculated by taking the sale price minus selling costs.

However, if your remaining mortgage balance is $250,000, for example, and your home sells for $500,000, you’ll net $250,000 minus the remainder of your other costs.

We’ll break down the basic selling costs below but you can take a shortcut now and jump right to HomeLight’s free Net Proceeds Calculator to get an idea of how much you might make selling your home.

How much does it cost to sell a house?

Now that you understand how the sale proceeds are divided, we’ll examine the breakdown of the specific costs involved with selling your house. This will help you craft a more accurate estimate of the proceeds you’ll ultimately pocket.

Keep in mind that total out-of-pocket costs vary from sale to sale, as a number of variables and decisions affect the outcome. However, there are some general trends to consider.

Knowledge is key throughout the process. If you’ve got a really good agent working on your behalf, vetting these offers, you could go in the direction where you pick the offer that’s letting you walk away with the most money.

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  Marissa Papa Real Estate Agent at Preston Gray Real Estate

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  Currently accepting new clients

  • Years of Experience 21
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  • Average Price Point $390k
  • Single Family Homes 428

What are common expenses for home sellers?

Based on our interviews and research, here are some of the top expenses you can expect when selling a home.

Preparing your home for sale

Getting your home ready to sell isn’t free. Cleaning, repairs, staging, and curb appeal upgrades all come with costs.

As repairs and improvements can add a hefty sum to your costs, it’s best to consult with your Realtor® before embarking on any projects to ensure that you choose the ones that are necessary or will yield the highest return on investment (ROI).

Paying the Realtor®

One of the biggest costs of selling a home is the real estate agent’s commission. Traditionally, agent fees ranged from 5% to 6% of the sale price, split between the buyer’s and listing agents, both paid by the seller. However, following the National Association of Realtors (NAR) landmark settlement, commission structures have changed.

Sellers are no longer required to cover the buyer’s agent’s commission, as agent fees have been decoupled. Instead, buyers must negotiate directly with their agents, while sellers typically pay around 3% for their own agent. For example, if your home sells for $450,000, you’ll likely pay $13,500 in commission to your listing agent.

Still, some sellers still offer to cover the buyer’s agent’s fee to attract more buyers and speed up the sale. Using the same example, covering both agent commissions would cost $27,000 in total.

While this might seem like a lot of money to part with, remember that working with a top agent can not only help you sell for top dollar but also save you the time it takes to market the house and deal with the stickier aspects of the transaction such as negotiations.

“Every agent commission is negotiable, so it’s in the seller’s best interest to negotiate the contract they sign with an agent,” says Papa.

Though not common in all states, some more complicated transactions such as ones involving a divorce between the sellers might involve a real estate attorney. Such professionals can run about $243 per hour, though this too is negotiable, according to Papa.

Try HomeLight’s Agent Commissions Calculator to get an idea of how much you might pay in Realtor® fees when selling your home.

Seller concessions

During the contingency period, negotiations between buyers and sellers usually take place that sometimes result in concessions or incentives in the buyer’s favor.

For example, if the property inspection shows that significant repairs related to the safety of the house or the health of future occupants are needed, the seller might either pay directly for those repairs to be done before closing or credit the buyer an agreed upon amount to cover the work.

In other scenarios, sellers might agree to cover all or part of the buyer’s closing costs. Sometimes even a reduction of the previously agreed-upon sale price can come into play, reducing the amount a seller will net from the transaction.

These costs vary from market to market and property to property. However, Papa advises ways to mitigate the costs. For instance, having a pre-listing inspection done can give you an opportunity to address any glaring issues so there are no surprises during the contingency period.

In a sellers’ market, some buyers will even waive the inspection contingency to sweeten their offer. Additionally, some people opt to sell a property as-is. However, consult with your agent to determine if that’s recommended for your property.

“Knowledge is key throughout the process,” says Papa. “If you’ve got a really good agent working on your behalf, vetting these offers, you could go in the direction where you pick the offer that’s letting you walk away with the most money.”

Closing costs and additional fees

Although your mortgage balance payoff will likely be the largest item you’ll pay for at closing, there are other expenses, some of which can vary by city or state.

On average, sellers pay about 6% to 10% of the sale price in closing costs. With a median U.S. home price of $396,900, prepare to pay as much as $39,690. However, keep in mind that the figure is highly variable.

An example of how much you might keep after selling a house

Use the following example based on the median home sale price to get a sense of how much you might take away from your sale. For further insights, check out national averages for sellers’ costs and fees.

Selling expense	Example cost	% of home sale price
Prepping your home for sale	$12,701	3.2%
Realtor® fees (commissions)	$11,907	3%
Seller concessions	$10,319	2.6%
Closing costs, taxes, fees	$11,907	3%
Mortgage Payoff	$152,000	38.3%
REET tax (varies by state)	$5,160	1.3%
Total selling cost example	$203,994	54.4%

*Based on the median U.S. home price of $396,900

• Final home selling price: $396,900
• Subtract the total of all selling expenses: $203,994
• Example of net proceeds: $192,906

Now before you pop the champagne to celebrate all the money you made, consider if your property sale proceeds are subject to capital gains tax. If the house was your primary home for at least two years or for at least two out of the five previous years, you may qualify to exclude up to $250,000 of profit from the taxation and up to $500,000 for married couples filing jointly.

How can you reduce your costs as a seller?

After crafting the right listing price to maximize your return, it’s natural to not want chunks of money taken out of your proceeds. The following are some ways to reduce your costs. However, remember that investing in the sale process can help you get more money out.

• Avoid the urge to over-improve or make unnecessary fixes
• If you’re handy, make DIY repairs where possible
• Negotiate a lower commission with your real estate agent
• Use a discount-commission agent or brokerage
• Put your home up for sale by owner (FSBO)
• Do not offer seller concessions or buyer incentives
• If you agree to pay closing costs, raise your home’s purchase price
• Time your home sale using HomeLight’s Best Time to Sell Calculator
• Use a top-performing agent with a proven list-to-sell ratio
• Opt for DIY staging
• Time your sale to avoid capital gains tax

As you look ahead to your next home purchase, try these other free HomeLight tools for buyers:

• Home Affordability Calculator
• Down Payment Calculator
• Closing Costs Calculator

Partner with a top agent for the best home-selling outcome

Your best bet for the highest home sale proceeds is to partner with a top real estate agent who can guide you through each step of the process. After negotiating an appropriate commission with your agent, they can help you craft the best list price, advise on what repairs are worth your while, market your property, steer you toward the most promising offer, and negotiate terms in your favor.

HomeLight’s free Agent Match platform can connect you with the highest-performing agents in your market who can help you make the best of your home sale.

Header Image Source: (Roger Starnes Sr / Unsplash)