First-time buyers were responsible for 27% of those sales, down from 31% in May 2021. All-cash sales accounted for 25% of May transactions, up from the 23% recorded a year ago.<\/p>\n
Higher prices and mortgage rates conspired to slightly slow sales, which were down 2.6% from the prior month and 8.6% from one year ago.<\/p>\n
Even though interest rates are rising, inventory is low in many markets. So, the seller\u2019s market is holding, but cooling.<\/p>\n
Still, estimating your potential profit is rarely a simple equation of subtracting what you paid for the home from your asking price.<\/p>\n
Besides your mortgage payoff, homeowners typically incur a number of costs in selling a home \u2014 whether they work with an agent<\/a> or offer the property for sale by owner<\/a> (FSBO).<\/p>\n Understanding the likely cost of a sale can help you to avoid being blindsided by unexpected expenses, set your asking price, and make informed decisions in the negotiating process.<\/p>\n Fortunately, by using the free tools available at Homelight, you can easily estimate your costs and even explore a variety of sale options.<\/p>\n \n\n\n\n\n Get a near-instant home value estimate from HomeLight for free. Our tool analyzes the records of recently sold homes near you, your home\u2019s last sale price, and other market trends to provide a preliminary range of value in under two minutes.<\/p>\n \n Home values across the United States recently increased an average of 19% in a single year<\/a>.<\/p>\n With values and markets changing so dramatically, now is a good time to check up on your home value. You may be pleasantly surprised to see what your house might be worth.<\/p>\n To get an initial idea, you can receive a quick online value estimate using HomeLight\u2019s Home Value Estimator<\/a>. This free automated valuation model<\/a> (AVM) tool crunches data from recent sales transactions, local market trends, and your home\u2019s latest selling price to provide a preliminary range of value for your property. Just enter your address<\/a> to receive an estimate in less than two minutes.<\/p>\n With a degree in finance from Penn State, Delaware agent Michael Kennedy<\/a> is quick to provide his clients with an Excel spreadsheet that includes net projections.<\/p>\n \u201cWhen agents begin by setting proper expectations for how long the home is going to be on the market, what the costs are, what that process looks like,\u201d he explains, \u201cit’s beneficial for clients.\u201d<\/p>\n As a top-notch Realtor\u00ae who works with 82% more single-family homes than the average Delaware Beach agent, Kennedy advises his clients they can expect to spend:<\/p>\n Those estimates apply for a property in good condition. If the home requires major maintenance or updating, the costs could rise substantially.<\/p>\n In other parts of the country, expenses vary drastically because of agents\u2019 commissions, state fees, contractors\u2019 fees, or lenders\u2019 requirements for financing.<\/p>\n Nationwide, sellers should plan to invest around 10% of the home price in selling costs in addition to the funds needed for their mortgage payoff.<\/p>\n If you sell your home for $407,600 \u2014 the median home value in the U.S. \u2014 your costs might run around $40,760.<\/p>\n However, your actual, total, out-of-pocket costs depend on your situation and a host of variable factors and decisions.<\/p>\n Here\u2019s a look at some of the factors that might affect your net profit.<\/p>\n An overview of the fees for selling a house<\/a> typically includes:<\/p>\n Research shows sellers usually recoup about 50% to 70%<\/a> spent on major renovations. Before undertaking any large renovation projects or repairs, consult with your Realtor\u00ae.<\/p>\n An experienced real estate agent can advise you as to which renovations<\/a> or repairs generate the most return on investment and which repairs you can skip when selling a house<\/a>.<\/p>\n Below are the costs of some repairs and low-cost, small upgrades that typically pay bigger dividends nationwide:<\/p>\n Beyond your mortgage payoff and any major renovations or repairs that significantly increase value, the greatest expense is what you pay for agent commissions.<\/p>\n Typically commission fees<\/a> are paid in full by the seller in the transaction.<\/p>\n In the U.S., Realtor\u00ae fees<\/a> average 5.8%. At first glance, that percentage might seem high. But, partnering with a proven professional can make a huge difference in your final net proceeds.<\/p>\n \u201cA good Realtor\u00ae,\u201d Kennedy says,\u201d is going to instruct you on the things that are going to add value to the house and or decrease skepticism by the buyer.\u201d<\/p>\n In fact, HomeLight\u2019s data show the top 5% of agents across the U.S. sell homes for as much as 10% more than the average real estate agent.<\/p>\n Many times, 2.5% to 3% goes to the listing agent, and the other 2.5% to 3% goes to the buyer\u2019s agent.<\/p>\n For example, based on the median home value of $407,600, you might expect to pay $23,640 in real estate agent commissions.<\/p>\n That fee is typically split evenly between the agents. In turn, they compensate their affiliated brokerage houses, which might be a 70\/30 split. With this example, that means each agent is likely to retain $8,274.<\/p>\n Part of the listing agent\u2019s commission is deployed toward marketing your property with professional photography, open houses, offline marketing, etc.<\/p>\n If you\u2019re curious about how much you might pay in commissions, visit HomeLight\u2019s Agent Commissions Calculator<\/a> to receive a fast, free online estimate.<\/p>\n From there, HomeLight’s free Agent Match<\/a> platform can quickly connect you with a top real estate agent in your area.<\/p>\n Home sales tend to involve several rounds of negotiation between the buyer and seller.<\/p>\n Typically, those discussions occur between the initial offer and the signing of the contract<\/a>, after the inspection<\/a> and\/or after the appraisal<\/a>.<\/p>\n Sellers sometimes provide the buyer with concessions or incentives<\/a> to move forward with the deal and close the sale. The cost of these concessions depends on your market and selling situation.<\/p>\n For example, if a home inspection uncovers plumbing problems or electrical hazards, the sellers might offer the buyers a credit<\/a> rather than spend the money to fix the problem before closing.<\/p>\n Since Kennedy worked in new construction for 13 years before going into brokerage, he usually does a walkthrough to generate a list of easy-to-fix, low-cost items that should be fixed prior to listing (such as a leaky faucet).<\/p>\n He also assesses HVAC (heating, ventilation, and air conditioning), roof, crawl spaces, basements, and other big-ticket items for significant damage to prevent undetected deficiencies from taking a big bite out of profits in the form of closing credits or other concessions.<\/p>\n Occasionally, sellers consider concessions to close a deal with first-time homebuyers. At lower price points, these buyers often get VA, USDA, or FHA financing with little to no money down.<\/p>\n \u201cMany first-time homebuyers just don’t have the capital to cover the closing costs,\u201d he explains. \u201cSo, they\u2019ll come in at or above price, then ask the seller for concessions back.\u201d<\/p>\n However, Kennedy cautions that sellers need to be careful about agreeing to concessions under those circumstances because they can raise a red flag for appraisers, who evaluate the property and provide an independent opinion of value. Typically, the home\u2019s value needs to be at least worth the amount the lender is financing.<\/p>\n Because of their potential to endanger the sale and the strength of the current sellers\u2019 market, Kennedy says, \u201cA lot of sellers aren’t willing to absorb those costs.\u201d<\/p>\n Some common seller concessions or buyer incentives include:<\/p>\n According to Business Insider<\/a>, ClosingCorp<\/a> data indicate the average closing costs in 2021 (including underwriting, title search, loan fees, and transfer taxes and excluding down payment) totaled $6,905. However, those costs varied by state<\/a>.<\/p>\n Nationwide, these are among the costs frequently paid by sellers:<\/p>\n Although it may seem like the lion\u2019s share of closing costs fall to the seller, \u201cThe cherry on top is proration,\u201d says Kennedy. \u201cAny taxes you’ve already prepaid such as annual taxes, quarterly HOA, utility, or other fees, you’ll get that money back at closing.\u201d<\/p>\n Capital gains<\/a> are profits earned from selling a financial asset, such as a house or land. The government taxes this income, though it\u2019s calculated differently from the way other income is taxed.<\/p>\n To claim a capital gains tax exclusion, a home seller must meet the IRS ownership and use requirements<\/a>. This means that during the five-year period ending on the date of the sale, the homeowner must have owned the home for at least two years and lived in the home as their main home for at least two years.<\/p>\n On the sale of a primary residence, a couple filing taxes jointly can realize up to $500,000 profit on the sale of a house without paying additional taxes.<\/p>\n A single individual selling a primary residence can realize up to $250,000 without an additional tax burden.<\/p>\n Capital gains beyond those thresholds are generally taxed at 20%. However, some home improvements<\/a> can be deducted from the total amount of profit.<\/p>\n Since the regulations can be complicated to interpret, it\u2019s best to consult your tax professional to determine if specific repairs or renovations are eligible.<\/p>\n While many homeowners don\u2019t necessarily count this as a direct cost of selling their home, it is an expense to consider.<\/p>\n To find out what it costs to move from your current home to wherever you\u2019d like to go, you can consult moving calculators at HomeAdvisor<\/a> or Move.com<\/a>.<\/p>\n To investigate how these common costs can affect the bottom line, assume a couple who file taxes jointly is selling their home in Any Town, USA with the median value of $407,600.<\/p>\n They owe $75,000 on their mortgage and haven\u2019t found a new home yet. They\u2019re just eager to capitalize on the seller\u2019s market. While they consider their options \u2014 maybe even to move overseas while they\u2019re young \u2014 they rent.<\/p>\n Here are some of the expenses they\u2019re likely to incur:<\/p>\n![\"homelight](\"https:\/\/www.homelight.com\/blog\/wp-content\/themes\/ccprototypev5\/images\/logo-small-cta.png\"){kind=logo}
\n <\/div>\n \n How Much Is Your Home Worth Now?<\/h3>\n
Start with a home value estimate<\/h2>\n
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When agents begin by setting proper expectations for how long the home is going to be on the market, what the costs are, what that process looks like, it’s beneficial for clients.<\/span><\/q>\n
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![\"Michael](\"https:\/\/media.homelight.com\/uploads\/agent\/picture\/3340156\/normal_Main_20Head_20Shot.jpeg\")
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How much does it cost to sell a house?<\/h2>\n
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What are common expenses for home sellers?<\/h2>\n
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Repairs and renovations<\/h3>\n
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Agent commissions<\/h3>\n
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Seller concessions<\/h3>\n
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Closing costs and additional fees<\/h3>\n
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Capital gains taxes<\/h3>\n
Relocation expenses<\/h3>\n
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At-a-glance home selling cost example<\/h2>\n