Sellers are quick to think about the profit gained from the sale of their home, and with good reason! After building equity and maintaining a property, the money gained from selling can put you in a position to build wealth. 

One of the most common seller mistakes is to forget about the costs it takes to sell your home. Many seller costs are paid out of the closing check, but there are some that you need to be prepared to pay upfront. Keep reading to learn the common expenses that come with selling your home!

Closing Costs

Overall, closing costs typically come to 1%-3% of the home price. A few days before closing, your mortgage lender will send a closing disclosure, outlining the terms of your loan, including your closing costs. No need to worry about covering these upfront - they can come out of your closing check. 

Below are the fees commonly included in the seller’s closing costs:

• Agent Commissions. The agent commission fee is typically split between your listing agent and the buyer’s agent. If you are selling your house on your own, you may still need to cover the commission of the buyer’s agent. 

• Realty Transfer Fee. The Realty Transfer Fee includes transferring the title of the property to the new owner. In New Jersey, this fee is paid by the seller. 

• Title Insurance. Title insurance protects the new owners from any liens or homeownership disputes, and is typically paid for by the seller. 

• Escrow Fees. Escrow fees, usually split between the buyer and seller, go to the escrow service that holds funds until closing day. 

• Attorney Fees. Many states require an attorney for closing day. Their fees are typically due at closing. 

Home Preparation

When you sell your home, you want it to be at its most appealing. To attract buyers, most homes need a bit of a refresh to get it ready for listing photos, open houses, and showings. 

• Staging Costs. Staging your home can make all the difference in listing photos and live showings. You can stage on your own, or hire a professional.

• Repairs. If you are aware of needed repairs, you can take care of these before listing your home for sale. Other times, a surprise issue may appear during the home inspection. Either way, set some money aside for repairs. 

Other Expenses

If you are selling a property, it usually means you are moving to a new home. Determine what additional expenses you’ll need to cover when moving. 

• Moving Costs. The further away you are moving, the more it will cost. Consider the price with and without professional movers.

• Costs associated with your next home. If you are buying instead of renting, you will need a downpayment and closing costs on the buyer side. If you already have a new place to live, you may be paying two mortgages (or one rent and one mortgage) while you wait for your home to sell. For those renting, you’ll need to cover your security deposit, as well as first and last month’s rent. 

• Prorated Fees. You are responsible for property taxes up until your closing date, as well as HOA fees, when applicable. This can result in a prorated fee at closing. 

In most cases, you will make money on the sale of your home, but you’ll also need to cover the costs that come with selling. Knowing what the costs are and preparing for them will make the process less stressful. 

And just remember - your closing check will be coming shortly after closing!