If you are considering buying a home, you must know that property prices are currently at an all-time high.
The picture might look all rosy on the other hand, as this seems to be a great time to consider selling your house. According to a report by Reuters, house prices soared by 5.4% year-over-year, bringing the average price to $551,900. In July 2024 alone, there were 12,379 recorded home sales, making it an appealing time to sell a house.
However, did you know that selling a house involves unavoidable house selling costs?
Surprised?
Don’t worry—we assure that you won’t be clueless about it by the end of this blog. We will help you understand the cost to sell a house and develop a well-planned strategy whenever you decide to sell your property.
Introduction
Selling a house is not just time-consuming, but it can also be come with some excess expenditure. Many homeowners don’t fully realize the hidden costs of selling a house as they lack information or make impulsive decisions. While real estate agents can help secure favorable deals, it is necessary to be aware of all the house selling costs you should anticipate to ensure these expenses don’t eat away your profits.
On average, sellers spend around seven months preparing their homes for the market, with another three months needed to finalize the sale.
A research undertaken by Clever Real Estate found that Americans spend nearly $55,000 on house selling costs. In addition, 89% of sellers regretted aspects of their sale process, mostly due to unexpected expenses eating into their profits.
Understanding these costs ahead of time allows you to either reduce unnecessary spending or invest wisely to maximize your return.
The Hidden Costs of Selling a House
Selling a house can bring several expenses that might not seem obvious initially. These hidden costs of selling a house can surprise many sellers if they are not prepared to bear these additional expenses. We have tried to include all the necessary house selling costs you should anticipate:
- Appraisal Fees
An appraisal is essential to determining your home’s current market value. Standard home appraisals can cost between $300 and $450, with larger properties costing up to $2,000.. - Repair Costs
Repairs, especially unforeseen ones, can add up quickly. While small fixes can improve your home’s appeal, larger issues like structural repairs can significantly increase your cost to sell a house. - Closing Costs
Closing costs usually comprise processing fees, attorney fees, and property taxes. Depending on the location, closing costs can vary from $17,000 to $22,000. If ignored, closing costs can surprise the sellers. - Negotiation Expenses
Although not a direct cost, negotiations might require you to offer concessions, like covering inspection fees or even contributing to moving expenses, thereby reducing your profits. - Staging Costs
Staging a home makes it more attractive to buyers, but professional staging services can range between $2,000 and $10,000, depending on the property’s size and the level of preparation. - Inspection Fees
A pre-sale inspection ensures that plumbing, electrical, and other systems are in good condition. Inspections typically cost around $450 and help avoid problems during buyer negotiations.
How Much Does It Cost to Sell a House?
Although selling a home can seem profitable given the current market conditions, hidden costs can quickly bring your profits down. It is always better plan ahead and be willing to spend about 9-10% of the sale price on these various expenses.
Given below is the estimated breakdown of the house selling costs:
| Expenses | Estimated % of sale price |
| Real Estate Agent Commission | 3-6% |
| Staging and Preparation Expense | 1-4% |
| Inspection Fees | Can cost up to $450 |
| Repair Costs | Depends on the extent of necessary repair work |
| Title, Settlement, and Taxes | 1-3% |
| Concessions to Buyers | 0-6% |
Table 1: Breakdown of house selling expenses.
Source: Homelight, Inc.
Real estate agent commission occupies the lion’s share of the list of house selling expenses. While agents provide valuable services such as listing, negotiating, and securing buyers, their commission can significantly impact your profit margin.
Let us consider a hypothetical situation. Say you are selling a home in Brooklyn with a sale price of $600,000. Below is a breakdown of the typical costs you would incur:
- Real Estate Agent Commission (5%)
In New York, agent commissions usually vary from 5% to 6% of the sale price.- Cost: $30,000
- Closing Costs (2%)
Closing costs comprise attorney fees, title insurance, and transfer taxes.- Cost: $12,000
- Staging and Preparation (1-4%)
Professional stagers charge $2,000 to $10,000.- Cost: $3,000
- Home Inspection and Repairs
Let us assume that home inspection costs around $500 and minor repairs could cost $7,000.- Inspection Cost: $500
- Repair Cost: $7,000
- Appraisal Fees
Home appraisal fees in New York range between $300 and $600.- Cost: $500
- Concessions to Buyers
Concessions to buyers may include covering some closing costs or repairs.- Cost: $5,000
Total Estimated Costs:
- Real Estate Agent Commission: $30,000
- Closing Costs: $12,000
- Staging Costs: $3,000
- Inspection and Repairs: $7,500
- Appraisal Fee: $500
- Buyer Concessions: $5,000
Total Cost: $58,000
Net Profit:
Selling the house for $600,000 and subtracting the $58,000 in costs leaves you with a net profit of $542,000.
These hidden costs can impact your bottom line even in high-value markets like New York. Understanding these expenses can help maximize your profits.
Benefits of Selling a House
People sell their properties for multiple reasons. Sometimes, life or finances might require one to consider selling your house. While the reasons can vary, the benefit of selling a property, especially a house, can make you daydream about generating thousands of dollars worth of cash flow.
Of course, the closing costs and every other expense will eat away the profit you earn from the sale. But that doesn’t lower the attractiveness of selling a house.
Individuals usually hire agents to help them get a better deal as the entire process, from appraisal, repairing, and listing to all the legalities involved, costs a lot of time and effort. No wonder the job of a real estate agent is full-time work. Unless people understand the real estate market and its processes, it can be overwhelming for a seller to figure it out all alone without a real estate agent. In addition, selling a house without an agent can affect the house’s sale price. Data from several agencies suggests that people who hire real estate agents get a better sale price, as the agent is experienced in negotiating a property’s price.
As a result, people usually hire a real estate agent who charges a certain percentage of the sale price. This saves a lot of time and energy while optimizing the selling process.
However, many sellers express frustration with the hidden costs involved.
A study by Clever Real Estate found that while 80% of sellers followed their agent’s advice, 67% regretted it because the recommendations increased their expenses and lowered their profits.
Although hiring a real estate agent to find a suitable buyer is a popular practice, there is another way to go forward to avoid the real estate agent commission and other hidden costs completely.
Many sellers choose a ‘no-commission way’ for selling a house.
Suppose a seller wants to avoid all the additional expenses. In that case, they can get in touch with house buying companies that offer to buy properties while saving them from agent commissions, legal work, and repair and staging costs. These companies also offer to buy a property in all cash with zero to a minimum fee.
This is where Elite Properties enters the picture.
How to Avoid Real Estate Agent Commission: The Elite Properties Way
Elite Properties is a real estate company that offers to buy houses in their ‘As-Is’ condition without charging fees or commissions. The company offers the sale in cash, covering all the legal and closing costs, and assures that the deal will be closed in three days. Elite is open to buying houses in any condition, whether vacant or rented, paying or non-paying, distressed or in perfect condition. The company offers a good, profitable deal minus all the hassle and closing costs, and that too just in a few days.
If you’re looking to avoid real estate agent commissions and hidden costs, selling to a company like Elite Properties could be the answer.
By choosing Elite Properties, you can avoid the costs typically associated with selling a house. The following is a comparison between the two approaches – hiring an agent and selling your house to a house buying company:
| Cost of selling a house with the help of an Agent | Cost of selling a house to a house buying company |
| Sale Price: $600,000 | Sale Price: $540,000 (10% less than $600,000) |
Costs Involved:
| Costs Involved:
|
| Total Costs: $58,000 | Total Costs: $0 |
| Net Profit: $542,000 | Net Profit: $540,000 |
Key observations from the comparison:
- The traditional method results in a slightly higher net profit of $542,000. However, the seller bears multiple costs and may face a longer process (staging, repairs, inspection, commissions, and closing costs).
- Selling your house to house buying companies like Elite Properties results in a slightly lower profit of $540,000 due to the below-market offer, but it comes with zero expenses for the seller and a much faster, hassle-free transaction.
Conclusion: The Best Way to Save on House Selling Costs
Many sellers usually hire a real estate agent to help them sell their house. However, this way can cause you to shell out more money. One needs to be prepared to bear those expenses. Sometimes, if sellers are not mindful and strategic, these extra expenses may cause the profits to fall.
To avoid these expenses, people also sell their houses to house-buying companies that are willing to buy the property in cash. These companies offer a reasonable price while reducing the headache of paying real estate agent commissions and other expenses.
Elite Properties offers the best way to save on house selling costs for people who are eager to sell their houses but don’t want to spend a significant amount on the process.
For a hassle-free, commission-free home sale, Elite Properties is just a call away. The company helps sellers avoid costly repairs, staging fees, and commissions while taking care of all legal matters and closing costs.
Whether you are selling or know someone who is, contact Elite Properties for a quick, profitable, and stress-free sale.
FAQs
- What costs are involved in selling a house traditionally?
Ans: Selling a house traditionally may involve costs including staging expenses, repairs, inspection, commission, and closing costs. Taxes can also be part of the selling cost. However, any profit earned from real estate transactions is usually taxed. Taxes are upfront and not hidden like closing costs, which may be overlooked by the seller. - What fees do I avoid when selling my house to Elite Properties?
Ans: By selling your house to Elite Properties, you avoid costly repairs, staging fees, commissions, and closing costs. Elite Properties offers you a hassle-free process. - How much are closing costs for the seller in NY?
Ans: According to data from ClosingCorp., closing costs in New York average 3.1% of a home’s sale price (not including agent commissions). - Do I need to pay for repairs before selling my house?
Ans: If you go with the traditional option of selling a house, then yes. You will need to spend on the necessary repairs before listing your house for sale. The cost totally depends on the nature of the repair work that is needed in your case. The cost for repairs, therefore, varies. Getting the necessary repair work done will increase the value of your property.