It's no secret that buying a home can be a costly proposition. But you may be surprised to learn that the average American spends $18,342 to sell a home, according to data by Zillow and Thumbtack. This figure is based on a median home value of $210,200, so if you're sitting on a costlier property, that number will inevitably climb. If you're planning to sell your home in the near future, be sure to plan for the following expenses.
1. Realtor fees
When you hire a realtor to list, market, and sell your home, that person gets a fee that usually equals 5% to 6% of your home's value. This means that if you're looking to sell a $400,000 property, you might lose $20,000 to $24,000 to your realtor.
If that sounds like a lot, well, it is. Keep in mind, however, that your realtor doesn't necessarily get to keep all of that money. Often, that fee is split between the agent selling a home and the agent facilitating the purchase of the home -- i.e., the buyer's agent. Plus, many realtors work for larger firms that get a cut of their half of the proceeds.
Still, it's not a small sum to pay. The good news, however, is that you can try negotiating that figure. You might find a realtor who's just starting out or is desperate for business who might accept a 3% or 4% commission instead. Along these lines, you can technically sell your home without a realtor, but know that there are many drawbacks to going this route.
2. Real estate transfer taxes
Many sellers are surprised to learn that they're on the hook for transfer taxes when they sell their homes, but most states, cities, and municipalities impose these taxes to generate revenue. How much will real estate transfer taxes cost you? It really depends on where you live.
In Seattle, for instance, those taxes will total $8,487 for a median home value of $476,800. In other areas, that rate could be higher or lower, and some major cities have no transfer tax at all. If you work with a realtor, he or she should be able to give you a sense of the taxes you're looking at.
3. Home preparation costs
Unless your home is in absolute perfect condition, there's a good chance you'll need to sink a little cash into getting it to look its best. And if your property is in bad shape, you might spend a small fortune making repairs.
The average cost of basic home preparation projects, including painting, carpet cleaning, and landscaping/boosting curb appeal is $4,985 among sellers who hire professionals to do the work for them. This means that if you're willing to make the effort, you can reduce this particular expense to some degree.
There's also home staging to consider when selling. Some people hire professionals to set up their homes in the most appealing manner possible, but that's a service that could cost you big time. Realtor.com reports that professionally staging a 2,000-square-foot home will cost an average of $2,000 to $2,400 per month. Furthermore, most professional stagers impose a three-month minimum contract, which could bring your total up to $7,200 -- even if your home sells within a month. Thankfully, staging often is not a necessity and it's something you can get away with doing yourself.
Whether you're selling your home because you wish to downsize or you're relocating to another part of the country, don't let the above costs catch you off-guard. Know what expenses to expect when selling and be prepared to pay for some of them (like home preparation costs) upfront. This will help make an otherwise stressful process just a bit less harrowing.