The biggest “hidden” expenses are closing costs, which total $13,357 for the median-valued U.S. home. In San Jose, closing costs for the median valued home total $74,927, while in Indianapolis – which is in a state with no transfer tax – they total $8,604.
The average U.S. homeowner spends $18,342 in extra or “hidden” costs associated with selling a home, according to a Zillow and Thumbtack analysis[i].
Zillow and Thumbtack identified several common but often overlooked seller expenses and calculated what they would cost in markets around the country. Because most (61 percent[ii]) of today’s sellers have never sold a home before, many of these costs may come as a surprise — and a financial surprise is the last thing someone putting in all the time and effort required to sell a home wants to receive.
The biggest “hidden” expenses are closing costs, which total $13,357 for the median-valued U.S. home. Closing costs vary considerably market-to-market – in part because real estate transfer tax rates vary, but also because home values vary widely across the country. As part of these closing costs, sellers typically pay real estate agent commissions of 6 percent, which is shared between the sellers’ and buyers’ agents.
In San Jose, closing costs for the median valued home total $74,927, while in Indianapolis – which is in a state with no transfer tax – they total $8,604.
On top of closing costs, the cost of preparing a home for market is also substantial. Sellers who hire professional help spend $4,985, on average, covering basic projects: Painting, staging, house and carpet cleaning, lawn care and gardening, and local moving costs.
And the labor costs associated with these jobs varies significantly by metro: Sellers in San Jose, Calif., pay $6,580 on average, whereas sellers in Orlando, Fla., pay as little as $3,820 for the same projects.
This data shows that while it’s largely a sellers’ market out there thanks to very low inventory in many parts of the country, sellers aren’t always living on easy street and can encounter massive pain points. From unexpected costs to determining the right list price, no wonder three out of four sellers say it was stressful or challenging to sell their home, according to the Zillow Group Consumer Housing Trend Report 2017.
[i] This analysis includes real estate transfer taxes plus 6 percent in agent commissions as closing costs. It does not include myriad other closing costs such as title insurance fees, filing fees and the cost of points bought from mortgage providers. Zillow applied transfer taxes and 6 percent in agent commissions to the median home value for each area. In cases where metro areas cross one or more state lines, Zillow computed transfer taxes by using the tax rate for the primary state for that area. For home prep costs, Thumbtack looked at tens of thousands of quotes from small business professionals around the country and determined the average cost for each expense within the selected metros. For the purposes of this analysis, carpet cleaning, interior and exterior painting, lawn care, gardening, home staging, house cleaning and local moving costs were identified as five of the most popular seller prep projects completed by Thumbtack during the selling a home sale process.
[ii] According to the Zillow Group Consumer Housing Trends Report 2017.
