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What Are Home Sale Closing Costs, and How to Budget for Them?

Topics Covered in This Article

Home sale closing costs are often left off of budgets and home sale planning. However, this guide will help you factor in these costs so you understand them.

Most people think they need a real estate agent to sell a house. Of course, you can hire one if you want. However, you’ll pay for it.


The average homeowner in Pennsylvania pays 4.88% of the home’s selling price in closing cost, which is the highest rate of any state. So, you can plan to spend this much if you sell a house in Pennsylvania.


What are these costs when selling, and how can you plan for them?


Continue reading this guide to learn about the typical home sale closing costs to expect when selling your home.

Average Costs


As stated above, the average homeowner pays 4.88% of their home’s selling price. So, how much will it cost to sell your house?


At this rate, you can expect to pay nearly $5,000 for every $100,000. So, for example, you’ll pay nearly $15,000 if you sell your house for $300,000.


One thing to note is that you might spend more than this rate, as many people pay more than this for their broker fees alone. You’ll understand more about these expenses as you continue reading.

Staging and Landscaping


The cost of selling a home includes every expense you incur for the entire sale. When you first decide to sell your house, you might discuss the sale with a real estate agent.


The agent might suggest staging your home, which costs money. Staging prepares a house for sale by improving various parts of the home.


For example, you might need to spend some money on landscaping. After all, landscaping improves the home’s curb appeal. Curb appeal controls a person’s first impression when viewing your home, so it’s a vital aspect.

Broker Fees


One of the costliest parts of selling a house is your broker fees. Real estate agents don’t work for free. Instead, they rely on commissions from home sales.


Agents won’t receive commission checks until the home sale closes, but they earn a hefty amount from each home sale. Broker fee rates vary, but they can be as high as 7%. 


Of course, you can reap many benefits from selling without a realtor. The downside is that you’ll assume more work, as you won’t have an agent handling the sale for you. 

Home Sale Closing Costs

Attorney Fees


Many homeowners hire attorneys for assistance with home sales. Hiring a lawyer is beneficial for a home sale, but it’s costly. The fees you pay for legal services cut into your profit.


Fortunately, you might not need a lawyer. Therefore, you can avoid this home-selling expense if you choose not to hire one.

Title Insurance


Title insurance is an expense that both buyers and sellers pay. Generally, buyers and sellers negotiate with this fee. So, the buyers might pay the entire fee in some cases, while the sellers might be responsible in others. 


The most typical way to divide the fee is by requiring both parties to pay some of these costs.


Title insurance is the protection the buyer and lender value and appreciate. The purpose of title insurance is to protect against title defects the buyer discovers at any point while owning the house. 



Next, you can expect to pay some fees for inspections. For example, do you want to set the proper asking price for your home when listing it? If so, you might hire an appraiser to assess your home’s value.


Of course, you’ll pay an appraisal fee if you choose to get a pre-listing appraisal. Unfortunately, the buyer can’t use this appraisal to meet their lender’s requirements. Instead, they’ll need another appraisal.


The buyer might pay the appraisal fee for this assessment. But, then again, they might ask you to pay this fee. The buyer might also ask you to pay the home inspection fee and other inspection fees.



Many homeowners also turn to cleaning companies for help when selling. For example, you might need to hire a cleaning company to prepare your home for sale.


Additionally, you might need cleaning services before home showings. Some people even hire cleaning companies when moving out of their homes.


Home buyers expect to move into clean houses. If you can’t physically handle the work, you might have to hire it out.

Contingencies and Repairs


Home sellers also encounter expenses for contingencies and repairs.


Contingencies are conditions you agree to when selling a house. The buyer asks for things in the purchase offer, and you agree to them if you accept the offer.


Unfortunately, contingencies cost money. For example, the buyer might ask you to pay some of the financed closing costs. Many buyers ask for this contingency.


You’ll have to pay these costs if you accept the offer, so you’ll need to read through the contract carefully to see what it states.


Additionally, you can expect to encounter some repair bills. First, you might have to repair things when preparing your home for sale. Secondly, the buyer might include some repair contingencies in the purchase offer.


Repair costs add up quickly, especially if your home needs a significant amount of work.

Home Warranty


One additional cost of selling a house is for the home warranty you offer the buyer. A home warranty is like an insurance plan for the buyer, and these plans typically last one year.


The warranty provides discounted repairs to the home buyer for specific problems they encounter with the home during the first year. For example, they can receive discounted repairs if the furnace breaks.

What Are Home Sale Closing Costs, and How to Budget for Them?

Avoid These Home Sale Closing Costs


Selling a house costs money, and you should prepare for these home sale closing costs. However, there is an alternative way to sell a house that won’t cost so much.


Are you interested in learning about this method?


Contact First Choice Home Buyers to learn. We are a company that pays cash for homes. Selling a home for cash is more affordable, as you won’t have most of these expenses.

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