7 Unexpected Costs of Selling Your Home

August 16, 2024

Photo of a roll of United States dollars on a purple background

When you envision selling your home, you likely imagine a lucrative payday. And while, hopefully, your transaction will live up to that expectation, it’s wise to be a realist—projecting for expenses that’ll inevitably affect your earnings. 

Getting your home market-ready, listing it, and transferring it to the right buyer implies spending money. And even if you net an excellent profit on your home sale, these investments aren’t minimal, so it’s worth getting informed before you start your sale. 

Here are seven common unexpected costs of selling a home and what each implies.  

A home inspection (and the ensuing repairs)

In order to get your home in tip-top shape before putting it on the market, you need to know what’s wrong with it. And not all issues can be detected by an untrained eye. So, you’ll want to get a professional home inspection, which will cost you a few hundred dollars. The home inspector will identify issues like water damage, structural problems, or electrical flaws that you’d be wise to fix—or at least let buyers know about in your seller’s disclosure. 

Repairs to issues that a home inspection surfaces can be costly, and you’ll have to decide whether it makes more sense for you financially to make these changes or sell your home as-is and take a price cut. If you stand to earn a lot more for your home by making the fixes, then doing so is a good investment. And with a Titus closing line of credit (CLoC) of up to $125,000, you can make repairs now and pay back later, once your home sells at a great price. 

Renovations 

Making minor to moderate renovations to your home can make it more attractive to a potential buyer. Small cosmetic fixes, like repainting, putting in new bathroom tiles, or swapping outdated light fixtures can revamp the look of your home, bringing it into the present. It’s easier for a buyer to imagine settling into a home that looks contemporary and move-in ready—without worrying they’ll have to give the space a facelift first.

Get your real estate agent’s advice on renovations that’ll resonate with the local market. And check out a cost versus value report, which details renovations that earn back their investment or up the value of your property (as well as upgrades you’ll lose money on).

Finally, save yourself the hassle and money of working with a disreputable contractor by asking your real estate for recommendations on trusted providers. This way, your repairs will stay on schedule and you won’t pay to fix the errors of an inexperienced contractor. Cover your renovations now with a closing line of credit (CLoC) from Titus and pay later.  

Photo of an aesthetically-pleasing, nuetral-toned dining and living area.

Staging 

Whether or not you renovate your home, staging it to make it more appealing to potential buyers is a solid idea. When you “stage” a property, you remove personal items (like family photos), declutter, and swap out furniture and decor for trendy items that’ll attract a wide range of viewers. 

Get professional help with your staging project. These interior design pros rearrange furniture to maximize space and lend you new furniture, knickknacks, and art (at a cost). Use a closing line of credit (CLoC) from Titus to cover staging needs.  

Agent commissions

Working with a real estate agent to sell your home ensures a streamlined, legally-sound transaction. This professional can also help you negotiate a better selling price. In the end, their services pay off, but you also have to pay them. Agents earn through commissions, which means they don’t get paid until selling your home. Then, they earn a percentage of the total home sale. 

Traditionally, commissions for all agents (including the buyer’s) have been covered by sellers and at a rate of roughly 5 to 6% of the sale. But recent changes to real estate commissions imply new percentages. Discuss rates with your agent and sign onto them in a representation contract. You’ll also want to determine whether you’ll cover the full commission if the buyer will pitch in, too.

Once you’re clear on the commission rate and how much of it you are responsible for, you can calculate the amount of your sale that will move from escrow directly to the realtor to cover this fee. For example, if your payment is 4% of the sale and your home sells for $700,000, you’d pay $28,000 off the top.

Moving fees

Moving costs a few thousand dollars, with prices ranging due to the size of a home and the distance of the move. So, if you’re moving straight from one home to another, figure in the fees (and time) associated with getting your stuff to your new place. 

And if you haven’t found your next property yet, you’ll likely have to store boxes and furniture when you sell your current home. Storage units generally cost a few hundred dollars per month. Cover moving and storage fees with a Titus closing line of credit. 

Capital gains taxes

When you sell your home for more than you paid for it, you make a profit. And these earnings are subject to capital gains taxes. 

Capital gains tax calculations are based on several factors, like the amount of profit made on the sale, the seller’s tax bracket and filing status, and the length of ownership. Not all sellers are subject to this tax, but those who are could pay around 15% of their home sale to federal capital gains taxes and another percentage to their state. 

Photo of a woman at a kitchen table reviewing documents with a calculator.

Closing costs

The term “closing costs” refers to all fees associated with completing a real estate transaction. Both buyers and sellers pay closing costs, and sellers have a bit of an advantage in that the money to cover these fees can often come directly out of the home sale. A seller can expect to pay for the following items, but be sure to ask your agent for a comprehensive, accurate list.  

  • The agreed-upon real estate commissions  

  • Prorated property taxes 

  • Depending on the geographical area: title transfer taxes and fees and title insurance (owner’s policy)

Don’t let hidden costs hinder a high-value sale. Get a CLoC from Titus.

Getting hit with a ton of expenses when you’re trying to make money on a home sale can feel discouraging. But if you invest in repairing and renovating your home, getting a realtor’s help, and duly completing your transaction paperwork, you earn big in the long run. You’ll maximize your sale and prevent legal issues that could set you back financially. 

Work with a Titus real estate agent and get expert representation and advice—plus access to exclusive zero-interest financing for home upgrades. Learn how to partner with a Titus realtor and take out a closing line of credit (CLoC).