HOME SELLING COSTS: WHAT TO EXPECT WHEN SELLING YOUR HOUSE
WHY IT MATTERS: Just like choosing where to buy groceries or book a hotel, buyer a car, or really most services, sellers have different options for real estate services. Some opt for the bare minimum to save money, while others prefer full-service support for the best results. There’s a scenario for everyone, and each choice comes with trade-offs.
✔ For Sale by Owner (FSBO) – The DIY approach: You handle pricing, marketing, negotiations, and paperwork on your own. Pros: No commission costs. Cons: Much higher risk of things going wrong, from mispricing the home to legal and contractual mistakes that could delay or derail the sale; limited buyer exposure.
✔ Entry-Only MLS Services – Like paying a fee to list on a travel site but handling everything else yourself. Pros: Low upfront cost. Cons: Same as FSBO. You still manage showings, negotiations, and contracts, and buyers' agents may hesitate to work with you.
✔ Discount/Flat-Fee Brokers (~1-1.99%)– The budget-friendly hotel option: Agents charge a reduced fee and handle some aspects of the sale but not full-service marketing, negotiation, or transaction management. Some may claim that they offer the same services as the standard fee brokers, but do your research and make sure that it is true. In my humble opinion most of the times if it sounds too good to be true, it probably is. Pros: Lower commission. Cons: Fewer services, less strategic marketing, and more work for the seller.
✔ Full-Service Agents (2.5-3%) – Like staying at a high-end hotel where everything is taken care of: Strategic pricing, home prep guidance, staging, professional marketing, buyer screening, negotiations, and closing coordination. Pros: Less stress, higher sale prices, and smoother transactions. Cons: The highest upfront cost, but statistically speaking most sellers still choose this for the value it provides.
According to the National Association of REALTORS® (NAR), FSBOs accounted for 6% of home sales in 2024. The typical FSBO home sold for $380,000 compared to $435,000 for agent-assisted home sales. While FSBOs save on commission, they often net less due to pricing, marketing, and negotiation challenges. (Source: NAR)
💡 Pro Tip: In the end, it all comes down to how much work sellers are willing to take on, how well they understand local laws, and if they have the necessary paperwork to complete the sale. Selling a home is often the biggest financial transaction in a person’s life—whether you go DIY or full-service, consider the risks, legal requirements, and the potential impact on your bottom line.
WHY IT MATTERS: Every time a property changes hands, the local government charges a transfer tax—essentially a fee for recording the sale and updating property ownership records. These costs vary significantly depending on where you’re selling, and in most cases are they are split between buyer and seller unless the contract says otherwise.
✔ Washington, D.C. – One of the highest transfer tax rates in the region. Sellers typically pay 1.1% of the sale price for homes under $400,000 and 1.45% for homes over $400,000.
✔ Maryland – Transfer and recordation taxes vary by county. Generally, the state charges 0.5%, while counties add their own tax, which can range from 0.5% to 1.5%. Some counties, like Montgomery and Prince George’s, have higher rates, while others, like Frederick or Carroll, are lower.
✔ Virginia – Typically has the lowest transfer taxes in the region, with state and local transfer taxes adding up to about 0.1% of the sale price. However, Virginia has additional fees that Maryland and D.C. do not, including a grantor’s tax (usually around 0.1%-0.2%) and a regional congestion relief fee in Northern Virginia.
💡 Pro Tip: Transfer taxes can be one of the largest closing costs after agent commissions, so knowing your local rates can help you better estimate your net proceeds. Online estimators are a starting point, ultimately the title company will calculate the exact amount depending on many variables.
WHY IT MATTERS: Unlike some other closing costs, sellers typically do not have to pay for title insurance—this is a major cost for buyers to protect against potential ownership disputes. However, sellers are responsible for other title-related fees that ensure a clean transfer of ownership. These costs vary very much by jurisdiction and can range from $1,000 to $3,000+, depending on the sales price and location.
✔ Title Search Fees – Covers the cost of verifying that there are no liens, unpaid mortgages, or ownership disputes that could prevent the sale.
✔ Notary Fees – Required for officially notarizing documents, ensuring the legitimacy of the transaction.
✔ Deed Preparation Fees – Some jurisdictions require sellers to pay for the preparation of the new deed transferring ownership to the buyer.
✔Jurisdiction-Specific Fees – For example in Washington, D.C., sellers must pay a Tax Certificate Fee to the D.C. Treasurer, verifying that property taxes are paid in full.
✔ Settlement, E-Signing, and Administrative Fees – These cover the processing and handling of the closing paperwork by the title company or settlement attorney.
💡 Pro Tip: While title insurance is not a seller’s expense, sellers should budget for title search, deed prep, and settlement fees, which vary based on location and sale price. Be sure to review your settlement statement ahead of closing to understand these costs fully.
WHY IT MATTERS: Depending on the property type and location, sellers may face additional costs beyond standard closing fees. These include HOA-related charges, optional warranties, and legal fees that can impact the final net proceeds.
✔ Homeowners Association (HOA) Fees – If your property is part of an HOA, you may be required to pay transfer fees and cover the cost of providing mandatory resale documents to the buyer. These fees vary by HOA and can range from a few hundred to over a thousand dollars.
✔ Home Warranty (Optional) – Some sellers offer a one-year home warranty to make the home more appealing to buyers. This typically costs $300 to $600 and covers repairs for major systems and appliances.
✔ Repairs & Maintenance – If the home inspection reveals issues that could impact the sale, sellers may need to cover repair costs or offer a credit to the buyer. These costs can vary significantly depending on the extent of repairs.
✔ Attorney Fees (If Applicable) – While not required in every transaction, some sellers hire a real estate attorney to review contracts and oversee the closing process, adding to overall closing costs.
💡 Pro Tip: While some of these costs are mandatory, others—like home warranties and repairs—are negotiable. Consider which expenses will help secure the best deal without unnecessary spending.
Closing costs vary based on state, county, and local fees, with transfer taxes, recordation fees, and title costs making up the bulk of seller expenses. These estimates do not include real estate commissions, as sellers have different options—from selling on their own to using reduced or full-service agent representation.
✔ Washington, D.C. – Approximately 3.7% of the sale price, driven by high transfer and recordation taxes. D.C. has some of the highest closing costs in the region, particularly for homes over $400,000, where recordation taxes increase.
✔ Maryland (Montgomery County Example) – Approximately 3.9% of the sale price, making it slightly higher than D.C. due to county and state transfer taxes. Costs can vary by county, with some areas having lower rates than Montgomery County.
✔ Northern Virginia (NOVA) – Generally the lowest in the region, averaging around 1.5% - 2% of the sale price. While Virginia has lower transfer taxes, sellers should still account for grantor’s tax, congestion relief fees, and additional administrative costs.
💡 Pro Tip: Always request a settlement statement in advance to get a clear picture of exact costs before closing.
