Planning to sell your home in 2024? Here’s how much you’ll have to spend before you can enjoy any profit

Real estate industry changes

The largest single expense for home sellers is typically the real estate agent’s commission, which is usually 5-6% of the home’s selling price, split between both parties. For a $400,000 home, this could mean a commission of $20,000 to $24,000.

However, recent legal challenges to traditional commission structures could change this. In 2023, a jury found the National Association of Realtors (NAR) and several large brokers inflated commissions. Earlier this year the NAR reached a $418 million settlement, potentially leading to more competitive and transparent pricing, and If these lawsuits change how commissions are structured, sellers could see lower overall costs.

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Breaking down the costs

Before listing a home, most homeowners invest in repairs and upgrades, ranging from minor cosmetic updates like painting and landscaping to major renovations like kitchen or bathroom remodels. These costs can easily hit five digits. For example, a minor kitchen remodel can cost around $23,000, while more extensive renovations can double or triple this amount.

Staging a home involves arranging interior décor to showcase the property’s best features and make it more appealing to potential buyers. Professional staging services can cost anywhere from $500 to $2,000 or more depending on the size of the home and the length of time it stays on the market. Staged homes tend to sell faster and for higher prices, so this can be a worthwhile investment.

Closing costs are another significant expense when selling a home. These include title insurance, escrow fees and legal fees, which can amount to 2-5% of the sale price. On a $400,000 home, this could be an additional $8,000 to $20,000. Sellers might also have to pay prorated property taxes and other fees.

Hidden and surprising costs

While some costs are expected, others can catch sellers off guard:

Pre-inspection costs: Some sellers choose to have a home inspector identify any potential problems with their property before listing. This can prevent unexpected repairs from derailing a sale but adds $300 to $500 to the homeowner’s expenses.

Marketing: High-quality photos and a strong online presence are increasingly important for attracting buyers. Professional photography can cost a few hundred dollars, and additional marketing expenses, like premium listings or virtual tours, add to the total.

Home warranty for buyers: Offering a home warranty can make your property more attractive. This contractual guarantee covers repairs of broken systems and appliances in the home sale and typically costs $300 to $600.

Despite all of these costs, Clever Real Estate’s study said 64% of sellers still turn a substantial profit — at a median of $100,000. It’s all about how you strategize when it comes to the sale of your home.