How Much Does It Really Cost to Sell a House?

Selling your home costs more than you think. Not because anyone's hiding anything from you, but because most sellers do the math in their head using only two numbers: what the house sells for, and what's left on the mortgage. The number left over feels like the number you'll walk away with, and it almost never is. I want to walk through an actual net sheet, the document that lays out every cost in a sale, so you can see exactly where the gap comes from and why it usually isn't where people expect.

A Real Example: A $950,000 Sale

Let's say you're selling a home in my market, Southern California, for $950,000. Most sellers' mental math looks something like this: subtract whatever is still owed on the mortgage, and whatever's left is the number in their head. Say there's $492,000 left on the loan. $950,000 minus $492,000 is $458,000. That's the number a lot of sellers are picturing when they decide to list. The actual net sheet tells a different story, and the gap between that $458,000 and the real number is almost always bigger than sellers expect.

The Mortgage Payoff Is More Than the Loan Balance

The first adjustment happens before you even get to the big cost categories. Your mortgage payoff isn't just your remaining principal, it includes prorated interest up to the day escrow closes, since you're paying interest in arrears, and depending on your loan it may include a small reconveyance or recording fee to officially release the lien. On a loan like this, that can easily add a few thousand dollars beyond what your last statement showed as your balance. It's not a large piece of the total gap, but it's the first place the number in your head starts to shift.

Agent Compensation Is the Biggest Line Item

This is where most of the gap actually comes from. Real estate commission is negotiable, it's not a fixed percentage set by law or by any single company, but a combined rate somewhere around 5% is common in a lot of markets when you account for both the listing side and the buyer's side. On a $950,000 sale, 5% works out to $47,500. That's typically the single largest cost in the entire transaction, bigger than every other line item on the net sheet combined. I say this as someone whose own income comes directly from that same line item: it's real money, and sellers deserve to understand exactly what it's paying for, from pricing strategy and marketing to negotiation and managing the transaction through closing, rather than just seeing a number subtracted from their proceeds.

Title, Escrow, and the Smaller Costs

After compensation, the rest of the costs are individually smaller but still add up. Title insurance protects the buyer and lender against problems with the property's history, like unresolved liens or ownership disputes, and in many markets it's customary for the seller to cover the buyer's policy. Escrow fees pay the neutral third party handling the funds and paperwork through closing, typically split between buyer and seller. Then there's a list of smaller items: county transfer taxes, prorated property taxes up to the closing date, any HOA transfer or document fees if the property has an HOA, and a payoff or termination fee if there's a lien beyond the primary mortgage, like a solar loan or home equity line. None of these individually move the number much, but stacked together they're often $10,000 to $15,000 on a sale at this price point, and exactly which ones apply depends entirely on your property and your local customs.

Repair Credits Can Move the Number Again

Even after you've accepted an offer, the net sheet isn't necessarily final. Once a buyer's inspection comes back, it's common for them to come back with a request, maybe the water heater is near the end of its life, maybe there's a roof issue, maybe the electrical panel needs attention. Sellers have options at that point: fix it before closing, offer a credit toward the cost, or hold firm and let the buyer decide whether to move forward anyway. Any credit you agree to comes straight off your net proceeds, on top of everything already on the sheet, which is exactly why I tell sellers to think through likely repair requests before listing, not after an offer is already in hand. A pre-listing inspection can surface these issues early, giving you the choice to address something on your own terms instead of negotiating it under pressure once you're already in escrow.

What's Actually Left

Add up the mortgage payoff adjustment, the roughly $47,500 in compensation, and the smaller title, escrow, and miscellaneous costs, and a $950,000 sale with $492,000 owed often nets out somewhere around $401,000, not the $458,000 a seller pencils out mentally. That's a real difference, and it's exactly why I walk every seller through an actual net sheet before we decide on a listing price, rather than letting them anchor to the simple subtraction that ends up being wrong by tens of thousands of dollars.

Why You Should Compare Offers by Net, Not Price

This same net sheet math is exactly why comparing two offers purely by their price can be misleading. An offer at $945,000 with the buyer covering their own closing costs and a clean, short contingency timeline can net you more than an offer at $955,000 that asks for a $15,000 credit and a longer inspection period. I build a net sheet for every serious offer that comes in, including the ones we end up turning down, specifically so a seller is deciding based on what actually lands in their account rather than the number printed at the top of the offer. The same logic applies if you're also buying your next home: negotiating room on your sale often comes with negotiating room on your purchase too, so the real comparison is the whole move, not one offer against another in isolation.

Capital Gains Is a Separate Calculation

Your net proceeds from the sale and your capital gains tax exposure are two different calculations, and sellers sometimes conflate them. Capital gains is generally based on your sale price minus your original purchase price, minus qualifying improvements you've made and documented over the years, not minus your mortgage payoff or your agent compensation. Many primary residence sales qualify for an exclusion, commonly up to $250,000 of gain for a single filer or $500,000 for a married couple filing jointly, provided you meet the ownership and use requirements, but the specifics of your situation, your basis, your improvements, your filing status, should go through a CPA or tax professional before you list, not after you've already spent the proceeds. This matters most if you've owned the home a long time, made it a rental at some point, or put real money into additions and major renovations over the years, since documented improvements can raise your basis and lower what's actually taxable. Keep your receipts and permits for anything major, because that paperwork is what lets your CPA actually use those costs when the time comes.

Costs That Never Show Up on the Net Sheet

One more category sellers often forget: money spent before you ever open escrow. Painting, decluttering, minor repairs, professional cleaning, sometimes staging, these come out of pocket well before closing and never appear as a line item on the net sheet, because the net sheet only tracks what happens inside the transaction itself. I tell sellers to track this spending separately from the start, both so they have an honest picture of what the sale actually cost them from first dollar to last, and because some of it may be relevant for your tax records depending on what you spent it on.

None of this means selling isn't worth it, most of the time it absolutely is, especially if you've owned the home for several years and built up real equity along the way. It means going in with real numbers instead of the version in your head, so there are no surprises sitting at the closing table, and so you can plan your next move around what you'll actually have to work with. Before you list, ask your agent for an actual written net sheet based on a realistic sale price, rather than a verbal estimate, so you know what you're actually working with before you make any decisions about your next move.