Real Estate Commission (Largest Cost)
The largest cost sellers pay is real estate commission, typically 5-6% of the sale price. This is split between the seller's agent (2.5-3%) and the buyer's agent (2.5-3%).
Example: On a $300,000 sale:
- Total commission: $15,000-$18,000 (5-6%)
- Seller's agent: $7,500-$9,000
- Buyer's agent: $7,500-$9,000
Commission is negotiable. Some agents accept lower commissions; others offer discounted rates for specific circumstances. Discuss commission before hiring your agent.
Title & Insurance Fees
- Title search: $150-$300
- Title insurance: $500-$1,200
- Title company closing fee: $150-$300
Taxes & Prorations
- Property taxes (prorated to closing): Varies based on when you've paid taxes
- Homeowners association (HOA) transfer/estoppel fee: $50-$300
- HOA dues (prorated to closing): Varies
Recording & Legal Fees
- Recording fees: $50-$150
- Attorney fees: $100-$300 (Indiana often requires attorney review)
- Transfer tax: Varies by county; Indianapolis has no transfer tax
Inspections & Repairs
- Pre-listing inspection: $300-$500 (optional but recommended)
- Requested repairs: Varies (you can negotiate these with buyers)
- Radon testing/remediation: $300-$2,500 (if required)
Marketing Costs
Most agents cover marketing costs, but some charge for:
- Professional photography: $200-$400 (usually agent-covered)
- Virtual tour: $50-$300 (usually agent-covered)
- Listing sign/lockbox: Usually agent-covered
- Open house materials: Usually agent-covered
Seller Concessions
If your home has issues or you want to incentivize buyers, you might offer:
- Buyer's closing costs credit: 1-3% of sale price ($3,000-$9,000)
- Repair allowance: Negotiated with buyer
- Price reduction: Instead of credit, seller lowers price
Example of Total Seller Costs
Selling Price: $300,000
- Real estate commission (5.5%): -$16,500
- Title insurance & search: -$1,200
- Property taxes (prorated): -$2,000
- Recording & legal fees: -$400
- HOA estoppel fee: -$200
- Buyer's closing cost credit (2%): -$6,000
Total Seller Costs: $26,300 (8.77%)
Net proceeds: $273,700
Ways to Reduce Seller Costs
1. Negotiate Commission
Ask your agent if they'll negotiate commission. Some agents accept 4-5% instead of the standard 5-6%, especially for higher-priced homes or quick sales.
2. Avoid Seller Concessions if Possible
Buyer's closing cost credits and repair allowances reduce your proceeds. If your home is in good condition and priced correctly, you shouldn't need to offer concessions.
3. Price Correctly
Overpriced homes sit longer, requiring price reductions and concessions to finally sell. Pricing correctly from the start maximizes net proceeds.
4. Sell in Spring/Summer
Homes sell faster in spring, reducing carrying costs (mortgage, insurance, taxes, utilities) during the selling period.
5. Use a Discount Broker (Cautiously)
Some online brokers charge 1-2% commission instead of 5-6%, but they provide minimal service. Make sure reduced commission doesn't compromise marketing and buyer access.
What Sellers Don't Pay
- Buyer's agent commission: Seller's agent pays this from the listing side commission
- Buyer's appraisal: Buyer pays this
- Buyer's title insurance: Buyer pays this in most cases
- Buyer's inspection: Buyer pays this
Quick Takeaways
- Real estate commission is 5-6% of sale price (largest seller cost)
- Total seller costs typically range from 8-10% of sale price
- Commission is negotiable—ask your agent
- Seller concessions reduce your net proceeds
- Pricing correctly minimizes carrying costs and concessions