How much does it cost to sell my house?

Key insights:

• Property transactions may seem complex, but seller costs are generally distributed between house prep, REALTOR® fees and closing costs.
• While selling a home likely requires upfront payments, some of the money spent will be put toward promoting the listing and attracting a buyer.
• By consulting an expert, sellers can determine where their money is best allocated during a home sale.

An important aspect of many home sales is the cost of selling the home. Sellers may be focused on the money they’ll earn upon a successful home sale, but it’s also typical for sellers to invest in their property before listing. By doing so, they can have a better chance of selling their home for top dollar.

Seller costs vary with each home sale, but they are generally broken into three overarching categories:

• Prepping your house for sale
• Hiring a Realtor
• Paying closing costs, which may include the buyer’s broker compensation

Here’s everything you need to know as you move forward and approach home sale costs.

Prepping your house for sale

Some spending is typically required before a home hits the market. And in today’s digital-first-world, web appearance is just as impactful as traditional curb appeal. To get your home to stand out online, you may need to make some adjustments to your space.

Minor pre-sale renovations could include:

• Home staging
• Painting your front door
• Replacing broken cabinet hardware
• Purchasing updated light fixtures

Major repairs might look like:

• Installing new carpet
• Repairing water damage from a leaky pipe
• Replacing your entry door or garage door

Exterior updates may involve:

• Landscaping
• Window washing
• Resurfacing the driveway

Remember to consult an expert as you take on pre-sale home projects. Your real estate agent can help recommend the renovations that appeal to buyers and provide the highest return on investment.

Hiring a REALTOR

The average cost of selling a home usually includes REALTOR fees. When hiring a REALTOR as a seller, you’ll agree to pay their commission rate, in exchange for their representation throughout the process of listing and selling the property. You may also pay the buyer’s broker compensation in order to attract the largest number of potential buyers.

Whether you’re a first-time home seller or you’ve done this before, it’s important to recognize where the payments you send your REALTOR are allocated. The distribution of REALTOR-associated costs typically includes:

• Listing agent’s commission
• Buyer’s broker compensation

The listing agent’s commission rate

To start, you’ll agree upon the commission rate paid to your listing agent. The listing agent’s commission is generally calculated using the total price of the home paid at closing along with an additional flat fee.

Edina Realty is a full-service real estate company that provides professional and comprehensive products and resources to our buyer and seller clients compared to discount brokerages. As a result, Edina Realty and our agents have been the local market leader for 24 consecutive years, offering:

• The largest local network of real estate professionals and their contacts
• High-quality marketing and promotional materials
• Industry-leading technology tools, website and mobile app

The buyer’s broker compensation

The buyer may pay a small fee, they may pay their agent’s compensation in part or they may pay their agent’s compensation in full. They may also request to have the seller pay the buyer’s broker compensation, which has traditionally been the most common practice.

Marketing and promotions

The listing agent’s commission often covers your home’s marketing and promotion costs. This means your agent may pay for things like:

• Yard signs
• Home photography
• Online advertising and flyers
• Printed flyers and mailings
• Custom video tour

As a seller, remember that part of the cost you pay in commissions may go toward landing you a top-dollar offer on your home.

Paying closing costs

As you march toward closing, your listing agent and the buyer’s agent will work alongside several other vendors to finalize the buyer’s:

• Loan application and approval
• Title commitment
• Home inspection
• Appraisal
• And more

These activities are all part of the closing process, and they each generate seller expenses called closing costs. The buyer’s closing costs usually range between 2 to 7 percent of the home’s purchase price. While the buyer is expected to pay their own closing costs unless it’s otherwise negotiated, buyers don’t always have the cash on hand.

As a seller, you can decide if you want to accept an offer from a buyer who is requesting that you pay their closing costs or buyer’s broker compensation. Keep in mind that homes attract the most attention and highest price in the first couple of weeks on the market, so it may not be in your best interest to wait for a better offer. The longer a home is on the market, the less desirable it becomes to potential buyers.

Moving forward with your home sale

To determine the cost of selling your home or to find a REALTOR to help you through the listing and sale process, we can help. Reach out to Edina Realty or your agent to get the assistance you need.