When you sell a house, expect to lose roughly 8% to 10% of the sale price to fees, taxes, and transaction costs, and then subtract whatever you still owe on your mortgage. On a $400,000 sale, that’s $32,000 to $40,000 in selling costs alone before the mortgage payoff comes off the top. The three biggest hits are agent commissions, closing costs, and (for a small share of sellers) capital gains tax. Preparation expenses and buyer concessions eat into what’s left.
Agent Commissions
Commissions are the single largest fee for most sellers. In 2025, combined buyer and seller agent commissions average about 5% to 5.5% of the sale price, or roughly $20,000 to $22,000 on a $400,000 home. You don’t write a check; the amount is deducted from your proceeds at closing.
A significant change took effect in August 2024 after the National Association of Realtors settled a class-action lawsuit. Under the old system, sellers routinely paid both their own agent’s commission and the buyer’s agent’s commission as a bundled fee. That’s no longer required. Sellers can now decide whether to offer compensation to the buyer’s agent, and buyers must sign a separate agreement with their own agent spelling out how that agent gets paid. In practice, many sellers still offer buyer-agent compensation because it broadens the pool of interested buyers, but it isn’t automatic anymore.
Commission rates are always negotiable. Discount brokerages, fast-moving markets, and higher-priced homes are the usual paths to a lower percentage. Whatever rate you agree to gets written into the listing contract, so negotiate before you sign.
Your Remaining Mortgage Balance
The mortgage payoff isn’t technically a selling cost, but it’s the biggest deduction from most sellers’ proceeds, and the number on the closing statement often catches people off guard. Whatever you still owe goes directly to your lender out of the sale funds before you see a penny.
The payoff figure isn’t just your current loan balance. Your lender calculates it to include the principal, accrued interest through the exact closing date (charged per day), and any applicable fees. Payoff statements are only valid through a specific date, so if closing slips by a few days, the per-diem interest keeps building.
Prepayment penalties are uncommon on mortgages taken out after January 2014, when federal rules limited them sharply. On loans that qualify as qualified mortgages, any prepayment penalty phases out completely after three years, and loans that don’t meet the qualified-mortgage standard cannot carry prepayment penalties at all.1Office of the Law Revision Counsel. 15 U.S. Code 1639c – Minimum Standards for Residential Mortgage Loans If your mortgage predates 2014 or is a non-standard product, ask your lender whether a prepayment charge applies before you list.
Closing Costs
Beyond commissions, transaction costs collectively run 1% to 3% of the sale price. They get itemized on the closing disclosure you receive before settlement.
Title Insurance
Most transactions require title insurance to protect the buyer and their lender against ownership disputes or hidden liens. In many markets, the seller pays for the buyer’s owner’s policy. Cost is generally around 0.5% of the sale price, so roughly $2,000 on a $400,000 home, though it varies by location and insurer.
Transfer Taxes and Recording Fees
State and local governments charge a transfer tax when property changes hands, sometimes called a documentary stamp or deed tax. Rates vary widely by jurisdiction, from a fraction of a percent in some places to 2% or more in others. A handful of states don’t impose transfer taxes at all. Whether the buyer, seller, or both pay also depends on local custom and negotiation. Recording fees to file the new deed are modest, typically between $15 and $175.
Property Tax Proration
You’re responsible for property taxes through the day ownership transfers. At closing, the settlement agent calculates a proration that credits the buyer for taxes you owe but haven’t yet paid. If your jurisdiction collects taxes in arrears, that credit can be sizable. It shows up as a deduction from your proceeds.
Attorney or Escrow Fees
Some states require an attorney to handle the closing; others use a title company or escrow agent. Attorney fees for representing a seller typically run $500 to $3,000, depending on complexity and local rates. Escrow or settlement fees pay for the neutral party that holds funds and processes documents.
HOA Transfer Fees
If your property sits inside a homeowners association, you’ll pay a transfer fee or estoppel certificate fee. The HOA issues a document confirming your account status, dues owed, and any special assessments. These fees range from under $100 to several hundred dollars, more if you need rush processing. Some states cap the charge; many don’t.
Capital Gains Tax
If you sell for more than you paid (after accounting for improvements), the profit is a capital gain. Most homeowners selling a primary residence owe nothing thanks to a generous federal exclusion, but a small share of sellers do owe.
The Primary Residence Exclusion
Federal law lets you exclude up to $250,000 of profit from the sale of your main home if you file singly, or up to $500,000 if you file jointly with a spouse.2Office of the Law Revision Counsel. 26 U.S.C. 121 – Exclusion of Gain From Sale of Principal Residence To qualify, you must have owned and lived in the home for at least two of the five years before the sale. Those two years don’t need to be consecutive. Because typical home appreciation falls well below these thresholds, most sellers pay zero federal capital gains tax.
When You Do Owe
Your taxable gain is the sale price minus your cost basis. Cost basis starts with what you paid for the home and grows with the cost of major improvements like a new roof, an addition, or a full kitchen renovation. Routine maintenance and cosmetic repairs don’t count. Subtract the basis from your net sale price, subtract the exclusion, and whatever remains is taxable.
Long-term capital gains rates come in three tiers: 0%, 15%, and 20%, depending on taxable income.3Internal Revenue Service. Topic No. 409, Capital Gains and Losses For 2025, single filers with taxable income up to $48,350 pay 0%. The 15% rate covers most middle- and upper-middle-income filers. The 20% rate applies only above $533,400 for single filers or $600,050 for joint filers in 2025. These thresholds adjust for inflation each year.
High-income sellers pay an additional 3.8% net investment income tax on top of the capital gains rate when modified adjusted gross income exceeds $200,000 single or $250,000 joint.4Office of the Law Revision Counsel. 26 U.S. Code 1411 – Imposition of Tax Any home-sale gain above the Section 121 exclusion counts as net investment income, so the effective top rate can reach 23.8%. The excluded portion is sheltered from the surtax too.5Internal Revenue Service. Questions and Answers on the Net Investment Income Tax
Prep Costs Before You List
Everything above comes out of your proceeds at closing. Preparation costs hit your bank account weeks or months before the house is even listed.
Professional staging averages about $1,850, with most sellers spending between $800 and $3,000 depending on home size and how many rooms get staged. Deep cleaning, landscaping, and cosmetic updates like fresh paint or new light fixtures add more. Some sellers also pay for a pre-listing home inspection, typically $300 to $500 for a standard single-family home, to surface problems on their own timeline rather than after the buyer’s inspection. Larger homes or properties with pools, septic systems, or older roofs cost more to inspect.
Certain jurisdictions require a certificate of occupancy before title can transfer, meaning a municipal inspector checks that the property meets current safety codes. Violations must be fixed before the sale closes. Even where no certificate is required, most sellers spend something on repairs, whether to address inspection findings or to stay competitive.
Concessions and Credits After You’re Under Contract
Once you have a signed contract, negotiations often produce further deductions. The most common: the buyer’s home inspection turns up a problem, and rather than fix it yourself, you agree to a credit at closing. That credit doesn’t change the official sale price, but it directly reduces the cash you walk away with.
Sellers also sometimes cover part of the buyer’s closing costs, especially when the buyer is using a government-backed loan with tight cash requirements or when the market favors buyers. A home warranty is another common concession, running roughly $300 to $1,200 per year depending on coverage. In a competitive seller’s market, you might give up nothing. In a buyer’s market, concessions of 2% to 3% of the sale price are common enough to budget for.
If the Property Isn’t Your Primary Residence
The tax picture changes substantially for investment properties, vacation homes, and rentals. The Section 121 exclusion doesn’t apply, so the entire gain is taxable, and depreciation you claimed (or could have claimed) on a rental is recaptured at up to 25%. Rolling the proceeds into another investment property through a 1031 like-kind exchange can defer both, but the deadlines are strict and the money must flow through an independent intermediary.6Office of the Law Revision Counsel. 26 U.S. Code 1031 – Exchange of Real Property Held for Productive Use in a Trade or Business or for Investment7Office of the Law Revision Counsel. 26 U.S. Code 1445 – Withholding of Tax on Dispositions of United States Real Property Interests8Internal Revenue Service. Exceptions From FIRPTA Withholding