Understanding the Costs of Selling a Home for First-Time Sellers

5 October 2025

Selling your home for the first time? Exciting, right? But, before you start picturing that big fat check in your hands, let's talk about something that often catches first-time sellers off guard—the actual cost of selling a home.

Yep, selling isn’t free. In fact, if you’re not prepared, the costs can take quite a bite out of your final sale price. But don’t worry! In this guide, we’ll break down all the major expenses so you know exactly what to expect. Let’s dive in!

1. Real Estate Agent Commissions: The Biggest Chunk

One of the biggest costs when selling a home? Real estate agent commissions. The typical commission is 5% to 6% of the home’s selling price. This fee is usually split between the seller’s agent and the buyer’s agent.

Let’s put that into perspective:

- If your home sells for $400,000, a 6% commission means $24,000 goes to the agents.
- If your home sells for $600,000, that jumps to $36,000.

That’s a big chunk of change! While some sellers opt for FSBO (For Sale by Owner) to avoid this cost, hiring a good agent can actually help you sell faster and often for a higher price—so it can be worth the expense.

2. Home Repairs and Upgrades: Fix It Before You List It

Would you buy a home with a leaking roof, scratched-up floors, or broken appliances? Probably not. Buyers want move-in-ready homes, so fixing up your place before listing is crucial.

Common pre-sale repairs include:

✅ Fixing plumbing issues
✅ Patching up chipped paint
✅ Updating old light fixtures
✅ Repairing flooring or carpeting
✅ Servicing HVAC systems

The cost? It depends on how much your home needs. Small touch-ups might only cost a few hundred dollars, but if your home requires major repairs, you might be looking at $5,000 to $10,000 or more.

3. Home Staging: Making It Picture-Perfect

Staging your home can make a huge difference in how quickly it sells. Buyers need to visualize themselves living there, and cluttered or outdated furniture isn’t going to help.

Professional home staging can cost anywhere from $500 to $2,500, depending on the size of your home and how much work is needed. But staged homes tend to sell faster and for more money, so it could be worth the investment.

A budget-friendly alternative? DIY staging! Declutter, rearrange furniture, and add some fresh flowers or neutral decor for that cozy, inviting feel.

4. Closing Costs: Not Just for Buyers

Most people assume that buyers pay closing costs, but sellers have their own share of expenses to cover. These typically include:

- Title insurance
- Property taxes (prorated amount)
- HOA fees (if applicable)
- Escrow fees
- Attorney fees (in some states)

Seller closing costs usually add up to around 1% to 3% of the home’s sale price. So for a $400,000 home, you might be paying around $4,000 to $12,000 in closing costs.

5. Capital Gains Tax: Will Uncle Sam Take a Cut?

If you’ve made a big profit on your home sale, you might owe capital gains tax. But here’s the good news: If you’ve lived in the home for at least 2 out of the last 5 years, you may qualify for an exemption of up to:

- $250,000 for single sellers
- $500,000 for married couples

If your profit is under these amounts, you won’t owe any capital gains tax. If it’s over, you might have to pay up—so check with a tax professional before selling.

6. Mortgage Payoff and Prepayment Penalties

Still have a mortgage on your home? You’ll need to pay off the remaining balance from your sale proceeds.

But here’s something many sellers don’t realize: Some lenders charge prepayment penalties if you pay off your mortgage early.

Prepayment penalties vary but can range from 1% to 3% of your remaining loan balance. Not all loans have these fees, but it’s definitely worth checking before you sell.

7. Moving Costs: Packing It All Up

Once your home sells, you’ll need to move out—and that comes with its own costs.

Here’s a rough idea of what moving expenses can look like:

📦 DIY Move (Renting a Truck) - $200 to $1,000
🚛 Local Movers - $1,000 to $3,000
🚚 Long-Distance Movers - $3,000 to $10,000

If you’re moving to another state or downsizing significantly, it’s a good idea to budget ahead for these costs.

8. Seller Concessions: Sweetening the Deal

Sometimes, buyers ask for help covering their own closing costs or request certain repairs before agreeing to buy. These are called seller concessions, and while they’re not required, they can help speed up the sale.

If the market is hot, you may not need to offer concessions. But in a slow market, being flexible with buyer requests can make a difference in getting your home sold.

Final Thoughts: How Much Will You Actually Keep?

If you’ve been doing the math, you’ll see that selling a home comes with quite a few expenses. So, how much of your home’s sale price will you actually take home?

Let’s break it down with an example:

Example: Selling a $400,000 Home

| Expense | Estimated Cost |
|-----------------------------|---------------|
| Agent Commissions (6%) | $24,000 |
| Repairs & Upgrades | $5,000 |
| Staging | $2,000 |
| Closing Costs (2%) | $8,000 |
| Capital Gains Tax | $0 (if exempt) |
| Moving Costs | $2,000 |
| Seller Concessions | $3,000 |
| Total Expenses | $44,000 |
| Final Proceeds | $356,000 |

So, even though you’re selling your home for $400,000, after all the costs, you’ll actually end up with around $356,000, depending on your situation.

Wrapping It Up

Selling your home isn’t just about setting a price and waiting for offers—it’s a process with a ton of hidden costs. But now that you know what to expect, you can plan ahead and maximize your profits.

Thinking about selling? Make sure to budget wisely, work with a great agent, and factor in all these expenses so you’re not caught off guard. The better prepared you are, the smoother—and more profitable—your home sale will be!