The fees when selling a house usually run between 8% and 10% of the sale price once agent commissions, title and escrow charges, transfer taxes, attorney costs, and smaller closing fees are added up. On a $400,000 home, that’s roughly $32,000 to $40,000 before you touch your mortgage payoff or any capital gains tax on the profit. Some of these costs you can negotiate. Others are set by law. And one of the biggest, capital gains tax, depends entirely on your own situation.
Agent Commissions Are the Largest Single Cost
For most sellers, the real estate agent commission dwarfs everything else on the settlement statement. The traditional model paid roughly 5% to 6% of the sale price, split between the listing brokerage and the buyer’s brokerage. That changed on August 17, 2024, when new rules from the National Association of Realtors settlement took effect. Sellers are no longer required to offer buyer-agent compensation through the Multiple Listing Service, and buyers must now sign a written agreement with their own agent before touring homes.1National Association of REALTORS®. National Association of REALTORS Reminds Members and Consumers of Real Estate Practice Change
In practice, many sellers still offer to cover the buyer’s agent because it widens the pool of interested buyers. You can make that offer off the MLS or structure it as a buyer closing-cost credit listed on the MLS.2National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers National averages for total commission currently sit around 5% to 5.5%, with each side’s agent typically earning 2.5% to 3%. On a $400,000 sale, 5% is $20,000. Because this is the largest line item, a small change in the rate changes your net check by thousands.
Some brokerages also add a flat transaction or administrative fee, often $250 to $600, to cover internal paperwork. Both commission and flat fees come straight off your proceeds at closing.
Title, Escrow, and Settlement Charges
Before the deed can transfer, a title company or attorney searches public records to confirm you own the property free of undisclosed liens and judgments. A title search runs a few hundred dollars. No buyer or lender will close without a clean report, so this one isn’t optional.
In many transactions the seller also pays for an owner’s title insurance policy that protects the buyer against future claims on the property. It’s a one-time premium, roughly 0.4% to 1% of the purchase price, which works out to about $1,600 to $4,000 on a $400,000 home. Who pays for this policy varies by local custom, so check what’s standard in your area before assuming it falls to you.
Escrow or settlement fees cover the neutral third party that holds the funds, manages document signing, and coordinates closing. These typically range from $500 to $2,000 depending on the sale price and your location. Some escrow companies charge a flat fee; others use a small percentage of the transaction. The charge appears on your settlement statement as its own line, separate from title.
Transfer Taxes and Recording Fees
Most state and local governments collect a transfer tax when real property changes hands. Rates vary widely. Some jurisdictions charge a flat amount per $500 of sale price. Others impose a percentage ranging from a fraction of a percent to more than 2% in higher-tax areas. On a $400,000 sale in a jurisdiction with a 1% rate, the transfer tax alone is $4,000. A few states don’t charge one at all, so this line can be zero or it can be one of your biggest costs.
Recording fees, by comparison, are small. The county recorder’s office charges to update the deed and release your old mortgage from public records, usually $50 to $150, though some counties charge by the page. Neither transfer taxes nor recording fees are negotiable. They’re set by law and collected at closing.
Paying Off Your Mortgage
If you still owe on the property, the remaining balance is paid off from the sale proceeds before you see a dollar. The payoff amount is not just your last statement balance. It includes principal plus interest accrued through the closing date, because mortgage interest is paid in arrears.3Fannie Mae. Calculating and Obtaining Confirmation of Payoff Amount Your lender will provide a formal payoff statement showing the exact figure for a specific closing date.
Once the loan is satisfied, the lender charges a small reconveyance or lien-release fee, usually $50 to $150, to file the paperwork removing their claim. Any home equity line of credit or second mortgage must also be cleared. All of these payoffs happen through the settlement agent, so you won’t be writing separate checks.
Prepayment penalties are rare on loans originated after 2014 because of federal restrictions, but they still exist on some conventional mortgages and certain loan products. Where one applies, it’s typically a set number of months’ interest and only triggers if you pay off the loan within the first few years. Check your loan documents or call your servicer before listing if you’re not sure.
Property Tax Proration
Property taxes don’t pause because you’re selling mid-year. At closing, the tax bill gets divided between you and the buyer based on how many days each party owned the home during the tax period. Close on September 1 without having paid the current year’s taxes, and you’ll owe roughly eight months’ worth, debited from your proceeds. If you’ve already paid the full year, you receive a credit for the portion covering the buyer’s ownership period.
The calculation method varies. Some closings prorate from the prior year’s tax bill, others use the current year’s assessed value and mill levy for a sharper figure. On a home with $6,000 in annual property taxes, a mid-year closing is roughly $3,000 off your side. Sellers who close late in the year after already paying the full bill actually get money back at the closing table on this line.
Seller Concessions to the Buyer
Negotiations often reach past the sale price. A seller concession is money you agree to put toward the buyer’s closing costs, loan fees, or repairs. These show up often after a home inspection: instead of hiring a contractor yourself, you might offer a $5,000 credit so the buyer handles the work after closing.
Concessions don’t require a check. They’re deducted from your proceeds on the settlement statement. The economic effect is the same as a lower sale price, though the headline price stays higher, which can matter for the buyer’s appraisal and loan approval. In a buyer’s market, 2% to 3% concessions are common asks. In a seller’s market, you may not need to offer anything.
Attorney and Notary Fees
Several states require an attorney to handle the closing. Even where it isn’t mandatory, many sellers hire one for the legal review. A real estate attorney typically charges a flat fee between $500 and $1,500 for a straightforward residential sale, which covers reviewing the purchase agreement, drafting the deed, meeting local recording requirements, and attending closing. Estate sales, trust-held property, or title problems can push costs higher, sometimes into hourly billing at $150 to $400 per hour.
Closing documents also need notarization. Signing at the settlement office usually makes the notary fee nominal. A mobile notary coming to you runs $100 to $200 for a loan signing, with additional travel charges for longer drives. Remote online notarization is available in most states and tends to cost less, though fees vary by provider.
Out-of-Pocket Costs Before Closing
These expenses happen before closing day, so they never appear on the settlement statement. They still come out of your pocket, and leaving them off your math is how sellers end up surprised by their net.
- Repairs and updates. Fixing deferred maintenance, repainting, updating fixtures, or addressing issues likely to come up in inspection. A few thousand dollars on targeted repairs often returns more than the cost in a higher sale price, but a full renovation rarely pencils out just to sell.
- Professional staging. A consultation runs about $150 to $600. Full staging with furniture rental averages around $1,800, with monthly room rental fees of $300 to $700 per room. Vacant homes benefit most.
- Pre-listing inspection. Spending $300 to $425 on your own inspector before listing lets you address problems proactively instead of scrambling after the buyer’s inspector finds them. Optional, but it can keep a deal from falling apart.
- Home warranty for the buyer. Some sellers include one, at $350 to $600 for annual coverage. It can make a listing more attractive and head off concession requests over appliances or systems.
Capital Gains Tax on Your Profit
This is the cost sellers most often overlook. Sell your primary residence at a profit and federal law lets you exclude up to $250,000 of that gain from income tax if you’re a single filer, or up to $500,000 if you’re married filing jointly. To qualify, you must have owned and lived in the home as your primary residence for at least two of the five years before the sale.4Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
For married couples claiming the $500,000 exclusion, both spouses must meet the two-year use test, though only one needs to meet the ownership requirement.4Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence You can only use the exclusion once every two years. If you don’t meet those requirements, or if your profit exceeds the exclusion, the taxable portion is treated as a long-term capital gain, assuming you owned the home for more than a year. For 2026, long-term capital gains rates are 0%, 15%, or 20% depending on taxable income and filing status.
Higher-income sellers face an additional layer. The 3.8% net investment income tax kicks in when modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly. The surtax applies only to the gain not already excluded under the primary-residence exclusion, and only to the portion of income above the threshold.5Internal Revenue Service. Questions and Answers on the Net Investment Income Tax These thresholds are not indexed for inflation, so more sellers hit them each year. If you’ve owned a long time in an appreciating market, run the numbers before assuming you owe nothing.
What the Full Picture Looks Like
Here’s a $400,000 sale with a $200,000 mortgage balance, a 5% total commission, and a 1% transfer tax rate:
- Agent commissions at 5%: $20,000
- Transfer taxes at 1%: $4,000
- Title insurance and search: $2,000 to $4,500
- Escrow and settlement fees: $500 to $2,000
- Attorney fees: $500 to $1,500
- Recording and miscellaneous fees: $100 to $300
- Mortgage payoff: $200,000 plus accrued interest
- Property tax proration: varies by closing date
Closing costs in this scenario, excluding the mortgage payoff, come to roughly $27,000 to $32,000. After paying off the $200,000 loan, net proceeds land somewhere around $168,000 to $173,000, before any seller concessions or capital gains tax. The distance between “my house sold for $400,000” and “I walked away with $170,000” catches sellers off guard every time. Running these numbers before you list puts you in a stronger position to price the home, read offers, and plan what comes next.