What It Actually Costs to Sell a House

Sellers do the same arithmetic every time: sale price minus mortgage payoff equals what I walk away with. It is wrong by a five-figure margin, and the gap is where every unpleasant surprise in a closing lives.

The rules on the largest line item also changed in August 2024, and a lot of the advice still floating around describes a system that no longer operates the way it's described.

What changed about commissions

The practice changes tied to the National Association of Realtors' antitrust settlement took effect on August 17, 2024. Two of them matter to you as a seller.

First, offers of compensation to buyer brokers "are no longer allowed on Multiple Listing Service (MLS) platforms." The old mechanism — where a listing automatically advertised what the seller would pay the buyer's agent — is gone from the MLS. Sellers "can still offer compensation off an MLS," through a broker's own website, signage, or direct negotiation.

Second, buyers now sign written agreements with their agents before touring homes, and those agreements must state the agent's compensation specifically, plus "a conspicuous statement that broker fees and commissions are fully negotiable and not set by law."

The practical effect for a seller is that buyer-side compensation is now an explicit negotiation rather than a default. It can be handled as an offer of compensation made off-MLS, or it can be handled as a buyer concession — and NAR notes that "Sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs)." Which route you take is a conversation with your agent, and it has real consequences for how many buyers can afford your house.

What did not change: a total commission somewhere in the range of 5 to 6 percent is still common in many markets, and it is still, and always was, negotiable. What did change is that nothing about that number is automatic anymore. Ask your listing agent, in these words: "What is your listing-side fee, and separately, what are you recommending we offer or concede on the buyer side, and why that number?" Two numbers, two answers.

The net proceeds arithmetic, in full

A worked example on a $450,000 sale with $310,000 left on the mortgage. Adjust the percentages to your market; the shape holds everywhere.

1. Sale price: $450,000.
2. Mortgage payoff: $310,000. Use the payoff quote from your servicer, not your statement balance — the payoff includes interest through the closing date and any recording or wire fees.
3. Listing brokerage fee at 2.5%: $11,250.
4. Buyer-broker compensation, negotiated at 2.5%: $11,250.
5. Seller closing costs — title and settlement fees, attorney where required, transfer taxes, prorated property taxes, recording: $6,000.
6. Buyer closing-cost concession agreed during negotiation: $5,000.
7. Repairs agreed after the inspection: $3,000.
8. Net proceeds: $450,000 − $310,000 − $11,250 − $11,250 − $6,000 − $5,000 − $3,000 = $103,500.

The naive calculation said $140,000. The real one says $103,500. That $36,500 difference is the down payment on the next house that people find out about eight days before they need it.

Transfer taxes: the cost that depends entirely on your state line

Some states charge nothing to record a deed. Others charge thousands. Florida imposes documentary stamp tax on deeds at 70 cents per $100 of consideration — $3,150 on our $450,000 sale — with Miami-Dade operating on its own split rate. Florida also taxes notes and written obligations at 35 cents per $100, and on mortgages that particular tax is uncapped.

Who pays is set by local custom and then by your contract, which means it's negotiable and frequently negotiated. Get the actual figure from a title company or closing attorney before you set a list price, not after you accept an offer.

Concessions have ceilings you should know before you agree to one

When a buyer asks you to cover closing costs, the amount you can effectively contribute is capped by their loan program. Fannie Mae limits interested party contributions on a principal residence or second home to 3% of the lower of sales price or appraised value when loan-to-value is above 90%, 6% between 75.01% and 90%, and 9% at 75% or below. Investment properties cap at 2%.

Concessions can cover closing costs, prepaids, and up to 12 months of HOA assessments after settlement. Fannie Mae "does not permit IPCs to be used to make the borrower's down payment, meet financial reserve requirements, or meet minimum borrower contribution requirements." A concession that exceeds the cap gets cut at underwriting, and the shortfall lands on the buyer days before closing — which is your problem too, because that's when deals die.

Staging, repairs, and the money you shouldn't spend

This is where sellers voluntarily hand back thousands of dollars, and where the honest advice is unpopular.

Worth doing, nearly always: deep cleaning, decluttering to the point of severity, a fresh coat of neutral paint on anything scuffed, fixing every small broken thing a buyer can touch — the loose handle, the running toilet, the dead bulbs, the door that sticks. Professional photography. Landscaping tidied. These are hundreds of dollars each and they change how the listing photographs and how the house feels in the first ten seconds.

Not worth doing, usually: a full kitchen or bathroom renovation to sell. You will not recover the cost, you will delay the listing by two months, and buyers who don't like your new countertops now dislike them at a higher price. This site's renovation budget article has the wider version of that argument.

Genuinely uncertain: full professional staging, which runs from several hundred dollars for a consultation to thousands a month for furnished staging. It helps most on vacant properties and in higher price brackets. It helps least on an occupied home that already photographs well. Ask your agent what comparable staged and unstaged listings actually sold for, and treat the answer as evidence rather than the industry's opinion.

Consider a pre-listing inspection if the house is older or you suspect problems. It costs a few hundred dollars and converts a post-inspection renegotiation — where the buyer has all the leverage and a deadline — into a disclosed condition you priced for on day one. It also creates disclosure obligations, so talk to your agent or attorney about how it interacts with your state's rules first.

The tax question most sellers get right by accident

Gain on the sale of a main home is often excluded from income entirely. Per the IRS, you may exclude "up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse."

The tests are specific. You must have owned the home for at least 24 months of the previous five years, and used it as a residence for at least 24 months of the previous five years. And you're "not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home."

Reporting still applies in some cases even when the gain is excluded: you must report the sale if you receive Form 1099-S or if you can't exclude the entire gain, using Schedule D and Form 8949. IRS Publication 523 is the full treatment, and if your situation includes a rental period, a home office, divorce, or a partial-year residence, read it or ask a preparer — those are exactly the fact patterns where the simple version stops applying.

Keep your improvement receipts. Capital improvements raise your basis and shrink your gain, which matters if you're anywhere near the exclusion limits.

Don't price high to leave negotiating room

The most expensive mistake on this page isn't a fee. It's overpricing on purpose.

A listing gets its heaviest traffic in its first two weeks, when it's new to every buyer with a saved search. Price above the market and you spend that window on people who leave without offering. Then you cut the price, and the listing shows a price reduction and a growing day count, and buyers who arrive later read both as "something is wrong with it." Houses that sell after two reductions routinely close below what they'd have fetched priced correctly on day one, having also carried two extra months of mortgage, taxes, insurance, and utilities.

The other thing not to do is choose a listing agent on commission alone. A one-point discount on a $450,000 sale is $4,500. An agent who mishandles pricing, photography, or the inspection renegotiation can cost multiples of that. Interview three, ask each for their last ten listings with list price, sale price, and days on market, and pick on that record — then negotiate the fee.

Before you list, ask your agent for a written net sheet at three different sale prices, with every line above filled in and your servicer's actual payoff quote in the mortgage row. Twenty minutes of work, and it's the only number in this process that's really yours.