Expect to lose 8% to 10% of your sale price to the fees associated with selling a house. On a $400,000 sale, that is $32,000 to $40,000 gone before you see a check. The bill is made up of agent commissions, title and escrow charges, transfer taxes, your remaining mortgage balance, prorated property taxes, any concessions you agree to give the buyer, and — if your home has appreciated enough — federal capital gains tax. Here is what each of those costs actually looks like, and where you have room to negotiate.
Agent Commissions
Commissions are the single largest expense in most home sales, historically running 5% to 6% of the sale price. On a $400,000 home, that is $20,000 to $24,000. The rate is set in the listing agreement you sign with your brokerage before the home goes on the market, and the fee comes out of your sale proceeds at closing rather than a separate check.
How commissions get shared with the buyer’s side changed on August 17, 2024, when new rules from a settlement involving the National Association of Realtors took effect. Listing agents can no longer advertise a specific commission split to the buyer’s agent through the Multiple Listing Service. Buyers now sign written agreements with their own agents that spell out compensation before touring homes. You can still agree to contribute toward the buyer’s agent fee, but the amount is fully negotiable and requires your explicit approval.1National Association of Realtors. NAR Settlement FAQs
Some agents also charge a transaction coordination fee of roughly $300 to $600 for administrative work on deadlines, disclosures, and paperwork. It may appear as a separate line item on your closing statement rather than being folded into the commission percentage.
Title, Escrow, and Settlement Charges
Several fees at the closing table cover the legal and administrative work of transferring ownership.
Title Search and Insurance
A title search examines public records to confirm you have clear ownership and the right to sell. Any liens or boundary disputes that surface have to be cleared before closing. An owner’s title insurance policy protects the buyer from ownership claims or defects the search missed, and it generally runs around 0.5% of the sale price, with variation by state and insurer. Whether the seller or buyer pays for that policy is set by local custom and is negotiable in the purchase contract.
Escrow and Attorney Fees
Escrow or settlement fees cover the neutral third party that holds funds and coordinates document exchange. They typically range from $500 to $2,000 and include wire transfers, courier services, and document preparation. About half of U.S. states require an attorney to oversee the closing. Where an attorney handles the seller’s side, flat fees generally run $500 to $1,500, though some bill hourly. These charges come directly out of your proceeds.
Transfer Taxes and Recording Fees
State and local governments impose a transfer tax whenever real property changes hands. It goes by different names depending on where you live: excise tax, documentary stamps, deed stamps. Rates vary widely. Some jurisdictions charge a flat amount per $500 or $1,000 of sale price; others use a sliding scale; a handful of states impose no transfer tax at all. On a $400,000 sale in an area charging $1 per $1,000, the bill is $400. In a high-tax jurisdiction it can run several thousand. Your settlement agent calculates the exact amount.
Recording fees are charged by the county recorder’s office to enter the new deed into public records. They typically run from $50 to a few hundred dollars per document depending on the county and page count. Small, but the sale cannot legally close until they are paid.
Mortgage Payoff and Prorated Items
Paying Off Your Mortgage
Your remaining loan balance is the largest single deduction for most sellers. The payoff figure is not the balance shown on your monthly statement — it includes interest accrued since your last payment, calculated per day up to the closing date. When you request a payoff statement, your loan servicer must provide an accurate total showing exactly what is required to release the lien.2Consumer Financial Protection Bureau. What Is a Payoff Amount and Is It the Same as My Current Balance
Some mortgages carry a prepayment penalty for paying off early, including through a sale. These are less common on loans originated after 2014 but still exist on some products. If your loan has one, the penalty will show up in your payoff statement. The IRS treats a prepayment penalty as deductible mortgage interest in most situations.
Prorated Property Taxes
Property taxes get split between you and the buyer based on the closing date, so each side pays only for the period they owned the home. Where taxes are paid in arrears, which is common, you owe the buyer a credit for the portion of the tax year that has already passed. If you have prepaid, you get a credit back. The settlement agent runs the proration on the closing statement.
HOA Dues and Estoppel Fees
If the property is in a homeowners association, you must settle any outstanding dues and assessments before closing. Most associations also charge for a resale certificate or estoppel letter confirming your account status and disclosing unpaid balances or violations to the buyer. Those fees typically run from $100 to a few hundred dollars and are usually the seller’s responsibility. Any HOA transfer fee is set by the association’s governing documents and is separate from the estoppel charge.
Concessions and Repair Credits
After the buyer’s inspection, you may be asked to contribute toward repairs or the buyer’s closing costs. These come straight out of your proceeds and usually take one of two forms:
- A repair credit: you give the buyer a dollar amount at closing to handle specific repairs themselves. Your nominal sale price stays intact, but your take-home drops by the credit.
- A price reduction: you lower the purchase price to reflect the estimated repair costs. That reduces the buyer’s loan amount and monthly payment, and also lowers your recorded sale price.
If the buyer is using a conventional mortgage backed by Fannie Mae, your total financing concessions are capped by their down payment. With more than 10% down, you can contribute up to 6% of the sale price. With 10% down or less, the cap drops to 3%.3Fannie Mae. Interested Party Contributions (IPCs) FHA and VA loans have their own separate caps. Anything above the applicable cap gets treated as a price reduction for underwriting.
Buyers using FHA-backed loans may also require you to address specific safety and habitability issues before the loan can close, including peeling lead paint in older homes, exposed wiring, roof defects, or inoperable heating systems. The cost of those mandatory repairs falls on you unless the buyer agrees to an alternative.
Home Warranty
Offering a home warranty to the buyer is a common negotiation tool that covers repair or replacement of major systems and appliances during the first year of ownership. A one-year policy typically costs $350 to $700 and is paid by you at closing. It is not required, but it can make a listing more attractive and reduce post-sale disputes over appliance and system failures.
Capital Gains Tax
If your home has appreciated significantly, federal capital gains tax can be one of the largest costs of selling. It can also be zero, depending on your profit and how long you lived there.
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 as a single taxpayer, or up to $500,000 if you file jointly with your spouse.4Internal Revenue Service. Topic No. 701, Sale of Your Home To qualify, you must have owned the home and used it as your primary residence for at least two of the five years leading up to the sale, and you can only claim the exclusion once every two years.5Office of the Law Revision Counsel. 26 USC 121 Exclusion of Gain From Sale of Principal Residence
Rates on Gains Above the Exclusion
Any profit above the exclusion is taxed as a long-term capital gain if you owned the home for more than a year. For the 2026 tax year, federal long-term capital gains rates are 0%, 15%, or 20% depending on your taxable income. Most sellers who owe fall into the 15% bracket. High-income sellers may also owe an additional 3.8% net investment income tax on the excess gain, which applies to single filers with modified adjusted gross income above $200,000 and joint filers above $250,000.
Reducing Your Taxable Gain
Your taxable gain is not simply what you paid subtracted from what you sold for. You can raise your cost basis, and reduce your taxable profit, by adding the cost of capital improvements made over the years. The IRS distinguishes improvements from routine maintenance. Qualifying improvements include adding a bathroom, replacing the roof, installing a new heating system, building a deck, or finishing a basement. Routine repairs like interior painting, fixing leaks, and replacing hardware do not count unless they were part of a larger renovation.6Internal Revenue Service. Publication 523, Selling Your Home Without records of those improvement costs, you cannot claim the adjustment and may end up paying tax on a larger gain than necessary.
How the Sale Gets Reported
The closing agent is generally required to file Form 1099-S with the IRS on any real estate sale of $600 or more. There is an exception for principal residence sales where the entire gain falls within the exclusion: if you provide a signed certification that the full gain is excludable, the closing agent does not need to file the form.7Internal Revenue Service. Instructions for Form 1099-S Proceeds From Real Estate Transactions Even without a 1099-S, you still need to report the sale on your return if you do not qualify for the full exclusion.
Prep and Staging You Pay Before Closing
Not every cost of selling shows up on the closing statement. Before your home is listed, you may spend money on repairs, cleaning, and cosmetic upgrades. Professional whole-house cleaning runs roughly $300 to $700. Minor repairs like patching drywall, fixing leaky faucets, or repainting rooms can add a few hundred to several thousand dollars depending on scope. Landscaping work such as mulching, trimming, or replacing sod supports curb appeal and can head off appraisal issues tied to deferred maintenance.
Staging is separate. An initial design consultation typically runs $300 to $600, with ongoing furniture rental averaging $500 to $600 per month per staged room. Most staging companies require a minimum contract of about three months, so staging a modest home can easily reach $2,000 to $3,000 before the property sells. These are upfront costs paid out of pocket, not deductions from your proceeds.