We Buy Houses Hassle Free!

  • This field is for validation purposes and should be left unchanged.

We Buy Homes in NJ

Welcome to Heyday’s Info Vault.

A wealth of information and advice from the experts.

How Many Closing Costs can a Home Seller Expect?

We all know that selling a home comes along with closing costs that take a bite out of the revenue you pocket. But how much money exactly should a seller expect to be shaved off the selling price? 

It’s hard to make blanket statements about seller’s closing costs, but we’ve done some research to get to a roundabout conclusion. While this article won’t give you an exact number for your specific closing costs, it will definitely give you an approximate idea of how much closing costs can amount to when selling your home. 

For the purposes of this article, we will imagine a house that’s valued at $300,000 in the state of New Jersey. 

Seller’s Closing Cost 1: Staging 

Staging involves preparing the property to appeal to buyers, which can include painting, cleaning, decluttering, landscaping, and rearranging furniture and decor. The cost of staging can vary widely depending on the extent of the work required, but it is typically worth it as it can help to attract more buyers and increase the sale price. 

According to cost comparison site Fixr, the average cost nationally to hire a professional stager ranges from $2,300 to $3,200. Those who invest time to do the staging themselves save themselves money, with experts estimating it could cost about .5% of the home’s value. 

So for a $300,000 home, .5% is $1,500. 

Seller’s Closing Cost 2: Home Repairs 

Making home repairs before selling a property can increase the overall sale price. Often, potential buyers will conduct a proper inspection on the property, which will delineate exactly which issues need repair. These can include replacing broken fixtures, outdated appliances, wiring, and damaged materials as well as repairing faulty plumbing, roofing defects, mold infestation and more. 

According to Fool.com, “While the total price of addressing issues revealed in the home inspection vary, a good rule of thumb is to set aside 2% of the sales price to cover any needed repairs.”

2% of $300,000 is $6,000. 

Seller’s Closing Cost 3: Property Transfer Tax 

Property transfer tax is a state-imposed fee that is collected when a property is sold or transferred. The tax rate is 1.5% of the selling price of the property, and must be paid by the seller or transferor. There are some exemptions to this tax, such as for certain transfers between family members or charitable organizations, but all other transfers are subject to the tax. According to Property Club, “For homes that sell for under $150,000 the NJ transfer tax is only 0.4%, but for homes above $1 million, it is around 1%, depending on the exact sale price.”

Since this article is about a $300,000 home we will assume a .6% property transfer tax. 

.6% of $300,000 is $1,800 

Seller’s Closing Cost 4: Miscellaneous Legal Costs 

Various additional costs including attorney fees, escrow, and title searches can amount to 1%, according to Opendoor.com

1% of $300,000 is $3,000 

OK, so we covered staging, repairs, taxes, and legal costs. 

Wait! We almost forgot the most important, largest chunk of the pie: Agents’ fees! 

Seller’s Closing Cost 5: Agent Fee 

On average, Bankrate estimates sellers pay 5% to 6% of the sale price as commission fees. Let’s average that at 5.5% 

5.5% of $300,000, means you’d pay $16,500 in agent commissions. 

Now, let’s add up all the costs and see how much the person selling his house for $300,000 pockets, at the end of the day. 

Property Transfer Tax0.6%1800
Misc. (Escrow, title fees,1.0%3000
Total Closing Costs9.6%$28,800

The total closing costs are $28,000. Subtract this from the home’s sale price of $300,000 and what do you get? 

$300,000 – $28,800 = $271,200

Yup, that’s nearly 10% chiseled off the sale price. 

While all this is based on estimations applied to an imaginary $300k house in NJ, and costs can vary based on property value and location, it is safe to assume that a seller’s closing costs can amount to approximately 10% of the selling price. 

Brought to you by Steven Honig, Real Estate Investor & Consultant

Call Us!