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May 11th, 2023 at 11:00 am

 

After years of enjoying your home and your neighborhood, you’ve decided to make a change. Maybe your growing family in Southern California needs a little more room to blossom. Maybe you’ve had your eye on upgrading to a new home . Or maybe it’s just time for the next chapter in your life.

Before you can turn the page on your home selling journey, you’ll need to strategize how you sell your home and, most importantly, factor in the cost of selling a house in California. Our California real estate agents are here to help you through every step of the home selling process.

How much does it cost to sell a house in California?

According to U.S. News Real Estate, the average cost to sell a house in the US is about $21,000. However, depending on your area, costs can range between $13,000 and $80,000. To roughly gauge your home selling costs, calculate about 10% of your home price or home’s sale value.

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To roughly gauge your home selling costs, calculate about 10% of your home’s sale value. Share on X

What are the costs of selling a house in California?

So where does all that money go? Find your answers here, with Berkshire Hathaway HomeServices California Properties’ guide to home-selling costs.

Wondering “How much does it cost to sell a house?” This guide will give you an in-depth answer starting with the first fees for selling a house right down to closing costs (and every hidden fee in between).

Common costs of selling a house

Estimated cost

Preparation costs A few hundred to a few thousand dollars
Staging costs $1,000-$5,000+
Carrying expenses A few hundred dollars
Commission 5-6% of your house’s selling price
Closing costs >$1,500
Taxes Depends on tax bracket
Mortgage payoff What you owe for the original cost of the home

1. Preparation costs

Once you’ve decided to sell your house in Southern California, there’s a lot to do to prepare the home for potential buyers. Preparations can cost between a few hundred and a few thousand dollars, depending on the extent of your projects.

Your preparation costs will depend on a few factors, including: 

The age of your home – Older homes may require a bit more polishing before hitting the housing market.

The condition of the home – If your home needs a few touch-ups, you’ll need to factor those expenses into your home-selling budget.

The size and layout – The size and layout of your home can play an important part in your preparation expenses. For example, hiring a carpet cleaning service for a one bedroom home will cost significantly less than doing so for a three bedroom home.

The neighborhood or “the competition” – Potential buyers will want to purchase the most appealing house in the area. When comparing your home to similar ones for sale in your neighborhood, a few preparations can help make your house stand out within the housing market.

The work you do prior to listing your home can ensure your home wins buyers over every time. This is why almost 80% of home sellers complete at least one home improvement project prior to listing their home.  

Additionally, preparation expenses are a crucial aspect of home-selling costs. They can make the difference between a good offer and a great one. 

Almost 80% of home sellers complete at least one home improvement project prior to listing their home. Share on X

Here are just a few examples of rewarding preparation projects to consider when selling your home:

Home improvements – You may have gotten used to the quirks of your home, but a few repairs and updates can excite buyers and increase selling potential. You may want to consider a few home improvement projects like:

Home seller tip: Bigger updates like adding a pool or remodeling a kitchen may be more trouble (and cost) than they’re worth. Cosmetic updates like improving the flooring or bathrooms can make the home more appealing to buyers without a hefty contracting bill.

Cleaning – Add cleaning (and decluttering) at the top of your preparations to-do list. Cleaning beautifies your home and creates an inviting atmosphere for potential home buyers. But some cleaning projects require professional help.

That can include:

Home seller tip: If you plan on remodeling or updating your home, save cleaning services for last. Any dust or debris buildup can be expertly swept away. 

Landscaping – Working with a landscaping or gardening service can improve your home’s curb appeal and excite potential buyers. 

Home seller tip: A lush green lawn and flowers can transform any yard. But be mindful of additional (and continuing) costs for any new landscape updates. Certain flora may require extensive watering fixtures or consistent visits from a gardening service. Instead, talk to your gardener or landscaper about using native plants in your yard makeover. 

Unlike time and labor-intensive non-native plants, native plants have adapted to the soil and climate of your area and require much less maintenance to grow and bloom. Bonus? You can help support your local ecosystems and draw eye-catching new neighbors—like songbirds and butterflies—to your yard. Talk about curb appeal!

But before you start shopping for a new stove or begin construction on a backyard water feature, talk to one of our expert California Properties real estate agents. Our California agents are experts in home preparations and can help you maximize your investment for a stunning transformation.

2. Staging costs

Home staging can enhance a house’s hominess. In a recent survey, 83% of buyer agents said that their clients could more easily imagine a staged home as their future residence.

Depending on your home’s size, staging could cost $1,000 or an upwards of $5,000, but those expenses can turn into a serious investment for your home and affect home price. A report of polled home sellers showed that staged homes could boost the value of a home by up to 10%.

Payment plan options can help mitigate these costs and up the value of your home. 

Home seller tip: If you’re looking to stage your home instead of selling a house as is, agents have said the three most important areas to decorate are the living room, the master bedroom, and the kitchen. 
83% of buyer agents said that their clients could more easily imagine a staged home as their future residence. Share on X

As you’re preparing for buyers to visit, be sure to focus on these three areas to impress potential new homeowners.

3. Carrying expenses

Carrying expenses encompass the typical costs of owning a home—but with additional maintenance and fees. If you’ve already moved to your new home, you may have to handle the burden of two home costs at the same time. 

For instance, this could include: 

Mortgage – Until you’ve sold your home, you will continue to make mortgage payments to your lender. 

Utilities – Imagine a potential buyer walking into your home, and trying to flip a light switch… then nothing happens. A bit of a turn-off, isn’t it? Electricity, water, heat, and gas must continue to be paid as buyers browse your home. 

Homeowners Association fees – Even if you’ve vacated the property, you must continue to pay Homeowner Association fees to your neighborhood’s HOA or risk additional fines and late penalties. 

Maintenance – To keep your home looking buyable, you’ll continue to pay maintenance expenses like gardener and cleaning services until the home is sold. 

Insurance – As long as you own your home, you must continue to pay homeowners insurance. However, the longer the house is on the market, the more likely it is that your insurance company will increase your rates. Insurance companies see empty homes as vulnerable to damages. So the faster you make a sale, the more consistent your rates will be.  

4. Commission

Your agent doesn’t charge by the hour, nor by the potential buyer. Instead, your agent is paid on commission. When you sign with a real estate agent or a listing agent, you will both agree on a commission percentage. A typical REALTOR® commission rate will be between 5-6% of your house’s selling price.

But you’re not just paying for your agent’s fees. The home seller pays for both the selling agent and the buying agent’s commission. The two agents will then split the cost of the agreed-upon real estate commission.

For example, let’s say you and your agent agreed to a 6% commission rate. When you sell your home, your agent and the buyer’s agent will each be paid 3% of your home’s sale price. 

As you’re calculating how much to sell a house for, be sure to factor in real estate agent fees and commission, especially when determining your home’s asking price. 

Home seller tip: When you’re working with an agent, you need to have an open conversation about the services and offerings included in the agent’s commission rate. For some agents, 6% doesn’t include many essential services required to help sell your home. 

Wondering how to find a good real estate agent? At California Properties, our compassionate and professional agents can give you everything you need for a successful home-selling experience. Our California REALTORS® and agents strive to be your advocate and partner throughout the selling process.
To discuss what services and offerings are available to you, find your nearest agent today!

5. Closing cost

Once you and your buyer have agreed to a selling price, there are just a few things left to do before your home is officially sold. Before you take down the “For Sale” sign, you’ll have to dot the i’s, cross the t’s, and cover some of your home’s closing costs. 

Here are a few costs home sellers may have to pay during the closing process:

Home buyer’s title insurance policy – A title insurance policy helps protect the buyer if the home’s past or present ownership comes into question. It’s customary for the seller to cover this expense. Title insurance can cost around $1,000.

Home inspections – While this cost is typically covered by the buyer, you may offer to cover this cost during purchase negotiations. Home inspections are recommended once a price has been agreed upon. A home inspector looks for signs of mold, lead, insect damage, and other foundational issues. A home inspection costs around $500, depending on where you live.

Pre-closing repairs Pre-closing repairs can be as simple as fixing a few cabinet doors or as extensive as addressing termite damage. The repairs may be requested by the buyer during negotiations or as a result of the home inspection. If the home inspection finds anything amiss with your home, your buyer can ask you to cover the costs of repair or subtract the repair expenses from the final price. 

Deal sweeteners – During negotiations, your real estate agent might talk to you about offering a few “deal sweeteners” to your potential buyer. These costs are not traditionally associated with home selling expenses but maybe a great tactic to help seal the deal.

They may include:

Attorney – Selling a home is a legal transaction. And while your real estate agent knows their stuff, plus all California Properties agents have access to a full in-house legal team, you still may opt for more in-depth legal insight from your own real estate attorney. If you choose to have an attorney vet your selling contract, you’ll have to pay their legal fees, conveyancing fees, or a fixed fee. 

Escrow fees – An escrow fee is any payment put in escrow that will accumulate fees. Whether you’re placing property taxes or home warranty payments in escrow, be sure to find out the additional expenses of using escrow. 

6. Taxes

To paraphrase (and take some creative license from) Mark Twain, there is only one certainty in the real estate game—taxes. Be sure to factor taxes like a transfer tax into your home selling expense calculations.

Depending on your situation, you may have to pay a few extra taxes and fees, including:

Capital gains tax – If you sell a home for more than you paid for it, you’ll have to pay a capital gains tax. You may be able to exclude up to $250,000 of profit (or $500,000 if you’re a married couple selling the home). This particular tax break applies if the home you’re selling was your primary home for at least two out of the last five years. However, if you’ve used the tax break on another home sale within the past two years, you can’t exclude that portion of the profit. 

Prorated property tax If you are escrowing into your mortgage, you’ll need to pay property taxes in advance. Home sellers should pay the prorated share of property tax right up to the closing date. 

7. Mortgage payoff

Once you’ve sold your home, your home selling costs aren’t quite over yet. You’ll need to pay back your mortgage lender what you owe for the original cost of the home.  

Sell a home successfully with us

When you’re selling your home, you may have more questions beyond “What does it cost to sell a house?” But with an expert at your side, you’ll be able to navigate the housing markets and any cost of selling a house in California informed and at ease.

The expert real estate agents here at Berkshire Hathaway HomeServices California Properties can guide you through each stage, cost, and fee of home selling, helping you maximize returns in the process. Whatever type of support you need a realtor for, you can find a local office near you!

Sources: 
  1. U.S. News. How Much Does It Cost To Sell Your Home?
  2. The OC Register. Selling a home in Los Angeles, Orange counties can cost 121% more than U.S. average
  3. U.S. News. How Do Real Estate Agents Get Paid?
  4. U.S. News. Buying A Home Costs More Than the Purchase Price
  5. Los Angeles Times.“Shopping around for Title Insurance Can Cut Closing Costs.” 
     

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