You don’t need much money to sell your house, but you do need some. Most of what selling costs — agent commissions, title fees, transfer taxes, your remaining mortgage balance — comes out of your sale proceeds at closing, not your checking account. What you do pay upfront is the prep work: cleaning, small repairs, staging, maybe a pre-listing inspection. On a $400,000 sale, deductions at closing can easily run $30,000 to $50,000, so the equity figure on your mortgage statement is not the check you’ll walk away with.
What You Actually Pay Before Listing
This is the cash-out-of-pocket portion. Professional deep cleaning runs roughly $200 to $500 depending on square footage and whether you need carpet or window specialists. Landscaping for curb appeal — fresh mulch, trimmed hedges, seasonal flowers — often costs $500 to $2,000. Cosmetic fixes like patching drywall, replacing leaky faucets, and repainting in neutral tones can add several hundred more.
Staging is where the numbers jump. Professional staging for a typical three-bedroom home costs roughly $1,500 to $4,000 and involves renting furniture and decor. If you’re on a tight budget, decluttering aggressively and rearranging your own furniture gets you partway there for free.
A pre-listing home inspection is optional but useful. Hiring an inspector before you list typically costs $300 to $425, and it lets you find problems on your terms rather than scrambling to respond when a buyer’s inspector finds them mid-negotiation.
What Comes Out of Your Proceeds at Closing
Agent Commissions
Commissions are usually the single largest cost of selling. Listing agent commissions now average roughly 2.5% to 3% of the sale price. If you also agree to cover the buyer’s agent fee, total commissions may land in the 5% to 6% range. On a $400,000 sale, that’s $10,000 to $24,000.
Rules shifted in August 2024. Offers of compensation from the seller to a buyer’s agent can no longer appear on Multiple Listing Service platforms. You can still offer to pay a buyer’s agent, but the arrangement must be negotiated off the MLS, and buyers now sign a written agreement with their own agent — specifying a concrete number or rate — before touring homes. The practical effect for you: the buyer-side commission is negotiable in a way it wasn’t before, and whatever you sign in your listing agreement is what you owe once the deal closes.
You don’t write a check for commissions. They’re deducted from your proceeds at closing.
Closing Costs and Government Fees
A collection of administrative and government charges get subtracted from your proceeds on closing day. Amounts vary by location.
- Transfer taxes. State and local governments charge a tax when a deed changes hands. Rates range from as low as 0.01% in some states to 2% or more in others, calculated on the sale price.
- Title insurance. In many areas, sellers pay for an owner’s title insurance policy that protects the buyer against undiscovered ownership claims or liens. It’s a one-time premium based on sale price.
- Escrow or attorney fees. Someone coordinates the funds, files the deed, and makes sure every party gets paid. Escrow companies or real estate attorneys handle this for $500 to $2,000 in most markets. About half the states require an attorney at closing, which pushes cost higher.
- Recording fees. The county charges to update land records with the new owner’s name — typically under $200.
- Prorated property taxes. You owe taxes for the portion of the year you owned the home. Close on September 1, you cover January through August.
Ask your closing agent or attorney for a preliminary settlement statement early so nothing surprises you. The buyer receives a Closing Disclosure at least three business days before closing; sellers receive a separate settlement statement itemizing every deduction.1Consumer Financial Protection Bureau. What Is a Closing Disclosure?
Mortgage Payoff and Other Liens
Before you receive a cent, every financial claim against your property gets paid. Your lender issues a payoff statement showing the exact amount owed as of the closing date, including accrued interest and any administrative fees for releasing the lien. That amount is wired directly from the closing funds to your lender.
A home equity loan or HELOC gets paid off the same way, sometimes with early termination or administrative fees added by that lender. Other liens — unpaid property taxes, HOA delinquencies, contractor liens — must also be cleared before clean title can transfer.
Check your loan documents for prepayment penalties. They’ve become less common, but some mortgages charge a fee if you pay off the loan before a specified date.
When You Actually Need to Bring Cash
If your remaining mortgage balance exceeds what the home will sell for, you’re underwater, and this is the scenario where you genuinely need money to sell. You have two options.
The first is to bring cash to the closing table to cover the gap between the sale price and your mortgage balance plus closing costs. The second is to negotiate a short sale, where your lender agrees to accept less than what you owe. A short sale requires documenting financial hardship, and the process is slower and more complicated than a standard sale. Depending on your state’s laws, you may or may not remain on the hook for the remaining balance afterward.
Buyer Concessions and Repair Credits
Even after you agree on a sale price, the buyer may ask you to cover some of their closing costs or credit them for repairs found during inspection. These come directly out of your proceeds.
Repair credits typically range from $1,000 to $2,000 for minor cosmetic issues, $2,000 to $7,500 for moderate problems like aging HVAC or roof repairs, and $12,000 or more when inspectors find structural or foundation issues. Buyers often prefer a dollar credit at closing over having you hire contractors, because it gives them control over the work.
If your buyer is using a mortgage, the loan program caps how much you can contribute toward their costs:
- Conventional loans (Fannie Mae): 3% of the sale price when the buyer puts down less than 10%, 6% for down payments of 10% to 25%, and 9% when the buyer puts down more than 25%.2Fannie Mae. Interested Party Contributions (IPCs)
- FHA loans: up to 6% of the sale price regardless of down payment size.
- VA loans: up to 4% of the property’s reasonable value for concessions like funding fee credits, debt payoff, or prepaid insurance.3Veterans Affairs. VA Funding Fee and Loan Closing Costs
Anything you contribute beyond these limits gets deducted from the appraised value for loan purposes, which can kill the deal. Keep the caps in mind when negotiating.
Taxes on the Profit
If you sell your primary residence at a profit, federal tax law lets you exclude up to $250,000 of that gain from income tax as a single filer, or $500,000 if you’re married filing jointly.4Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence To qualify, you must have owned and used the home as your primary residence for at least two of the five years before the sale. Most homeowners fall within the limits and owe nothing.
If your gain exceeds the exclusion, the excess is taxed as a long-term capital gain. Taxable gain isn’t simply the sale price minus what you originally paid. You can add capital improvements to your cost basis, which reduces the gain. Adding a room, replacing the entire roof, installing central air, and paving a driveway all count. Routine maintenance and repairs do not.5Internal Revenue Service. Basis of Assets Keep records of every major improvement.
The closing agent or title company generally files IRS Form 1099-S reporting the transaction, with an exception when the sale price is $250,000 or less for a single filer (or $500,000 for a married seller) and you certify the home was your principal residence with the full gain excludable.6Internal Revenue Service. Instructions for Form 1099-S Proceeds From Real Estate Transactions
One boundary worth flagging: if you’re a foreign national selling U.S. real property, the buyer is required to withhold 15% of the gross sale price and remit it to the IRS. A reduced 10% rate applies when the buyer intends to use the home as a residence and the sale price is $1,000,000 or less, and no withholding applies to residence purchases at or below $300,000.7Office of the Law Revision Counsel. 26 USC 1445 – Withholding of Tax on Dispositions of United States Real Property Interests You can apply for a reduced withholding certificate on Form 8288-B if the actual tax owed will be less.8Internal Revenue Service. FIRPTA Withholding
Moving Costs After Closing
After closing, you still need cash for the physical move. Local moves generally run $1,000 to $3,000 through a professional mover, and long-distance relocations can exceed $5,000 depending on weight and distance. Packing supplies add a few hundred dollars.
If there’s a gap between handing over the keys and moving into your next home, storage fees and temporary housing eat into your proceeds quickly. Utility deposits at the new place also happen outside escrow, so you need cash on hand before your closing funds arrive. Wire transfers can take a day or two to hit your account after they’re sent.
Ask your closing agent for a preliminary settlement statement as early as you can. It shows every deduction from the sale price and gives you a realistic picture of net proceeds. Work backward from that number when you budget for the move, and keep a separate cash reserve for the transition. Planning around the gross sale price is how sellers end up short.