What Percentage Do You Lose When Selling a House?

What Percentage Do You Lose When Selling a House?

Selling your house can bring you good returns. However, the numerous costs of selling a house such as moving fees and agent commissions can eat into your profit. So, what percentage do you lose when selling a house? 

What Percentage Do You Lose When Selling a House?

Typically, sellers pay about 6% of the selling price in realtor’s commissions and 2% to 4% in closing costs bringing the total expenses close to 10% of the sale price. While those numbers are the standard, you can lower those costs through negotiation or choosing a non-traditional real estate transaction process.

Person writing on paper

Other additional expenses associated with selling your property include transfer taxes, mortgage pay off, and title insurance cost. If you are planning to sell your home, it’s important you understand the fees you need to pay, what way you’re carrying out the sale, and how they can affect your profit margins.

What Is the Real Estate Realtor’s Commission?

This is a fee paid to a realtor for the services offered to home sellers and buyers and is split between the buyer’s and seller’s agent. 

Although the commission can vary depending on where your home is located, it’s usually around 5-6% of your home’s sale price. For instance, if your home sells for $200,000, a 6% commission would be $12,000. So each agent will receive $6,000.

Who Pays the Commission?

The seller pays the commission in most cases. However, the buyer can also cover part of this commission because it’s included in the listing price. Note that both agents receive the commission after the seller and buyer sign the contract and agree on terms and the sale is completed. 

What Does a Realtor’s Commission Cover?

The real estate realtor commission covers the services a realtor offers during a home sale. For seller’s agents, it compensates them for coordinating prospective buyer visits and for the buyer’s agent for showing properties. 

What Are the Closing Costs?

Closing costs are the fees you pay after closing on your home and usually range from 2% to 4% of the sale price. However, they vary depending on the loan program of the buyer. Also, the amount you will pay depends on your location and the price of your house. Two of the most important closing costs are transfer and property taxes.

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Transfer Taxes

These taxes apply if you are transferring the title of your home to another person. The tax can be inspected at municipal, county, and state levels. However, the money you pay depends on where your house is located. 

For example, 12 states charge no transfer tax while Arizona charges a $2 flat transfer fee. The transfer taxes for the remaining states range from 0.01%-5% of the selling price.  The title or escrow company will also have a fee to manage this process.

Property Tax

Property taxes are only paid if they are escrowing into your mortgage. You should pay the tax up to the closing day and place the money in escrow. 

However, if you have paid your taxes and want to sell your home, you may be given a rebate at closing. This means the buyer will reimburse you for the taxes you may have paid after the closing day. 

How to Estimate Closing Costs

For buyers, after submitting your mortgage application, you will get a Loan Estimate (LE) from your lender within a few days. So if your mortgage is $300,000, expect to pay $6,000 to $15,000 in closing costs.

The costs are divided into two categories:

  • Property-related expenses: They cover the fees your lender incurs when assessing the home you are financing.
  • Mortgage-related expenses: They cover your application processing fees.

It’s also a good idea to speak to your lender and check your mortgage documents to know what you are expected to pay. Depending on the loan type, the seller may have costs they are legally required to cover.

Additional Factors That Affect How Much You Lose

Keep in mind there are other factors that affect the percentage you lose when selling a house. Here’s an overview of the several costs related to selling a house.

Home Transition Costs

The transition period between moving into a new house and selling your current one can make you pay ownership expenses for two houses if you have closed on a new one. The costs can include property taxes, utility fees, and mortgages.

Also, if you are still looking for the perfect home or you haven’t closed on your new house, you will have to pay for temporary living. However, if you sell with CA Flat Fee, you will save money on the listing commission which helps offset any of these other expenses you may face.

Mortgage Pay Off

Before closing the sale, you will need to clear your mortgage. Your home sale proceeds will be used to clear the mortgage. If the amount on your mortgage is less than what you owe, you will have to add the accrued prorated interest to the total balance. 

Also, if your mortgage has a prepayment penalty, you may need to pay a small fee. To know if your loan has this penalty, call your current lender or check your loan documents. Prepayment penalty ranges from 2% to 4% of the initial loan amount.

Stacks of coins beside a wood carved house

Relocating Costs

You may relocate before or after the closing. However, the three factors that affect moving costs include:

  • Whether you are hiring expert movers or moving yourself
  • The distance you are moving, whether short or long
  • The number of items you are transporting

Professional movers can pack your items, transport them to your new house and unpack them. However, you may have to pay an hourly or flat fee for such services. Keep in mind that movers also charge more to transport heavy items and for moves involving longer distances.

Title Insurance

In some cases, the seller may be required to pay for a separate policy to protect the buyer if the home has ownership issues. The average cost is around $1,000. 

Also, during the sale process, the title company may conduct a title search on your home. If a lien is revealed on your property, you will have to settle it before selling the home.

Related Questions

How Do You Calculate Proceeds From Selling a House?

If you want to calculate proceeds from selling a house, subtract your outstanding mortgage from the estimated selling price. Also, exclude taxes and fees associated with selling a home. 

Why Do Realtors Get 6 Percent?

Realtors get 6 percent for facilitating the sale of your home. This commission is usually deducted from your property’s sale price and split between the listing agent and the buyers agent. 


There are many costs associated with selling a home. Take time to calculate the fees we have listed above to estimate the amount you may lose at closing. The more accurate you are, the less room there’s for unexpected surprises.

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