You've Sold Your House, but Here's Why You Won't Walk Away With as Much Cash as You Think

There's a reason so many people are struggling to buy a home these days. Not only are home prices still up, but mortgage rates are still pretty high. That combination has left many buyers with affordability issues to grapple with.

But while today's housing market isn't so favorable to buyers, for sellers, it's a different story. And if you're looking to sell your home today, you might end up with a pretty nice profit due to property values being up on a whole. 

Also, real estate inventory is still very low these days. As of the end of February, there was only a 2.6-month supply of homes on the market, according to the National Association of Realtors. It normally takes a six-month supply to fully even out the housing market so that neither buyers or sellers have an advantage. Because of this low inventory situation, you might receive multiple offers if you put your home on the market -- and that could result in a higher sale price.

But even if you manage to sell your home at a price you're really happy with, you might end up walking away with less money than expected. Here's why.

Different fees could eat into your profits

In 2021, when mortgage rates were super low and buyer demand was red hot, it was more feasible to sell a home without a real estate agent. But these days, buyer demand isn't quite as strong. Because of this, you may find that you need to enlist the help of a real estate agent to move your home off the market. And if you go this route, you're going to end up paying a fee. 

That fee might be substantial, though. Redfin reports that the typical real estate agent commission is 5% to 6% of a home's sale price. And it's on you, the seller, to pay that fee. So if you're selling a home with a $600,000 price tag, even if you're only looking at a 5% commission, that's still $30,000 of your profit. 

Then there are real estate transfer taxes to think about. These vary by state, but essentially, they're a fee you pay to sell your home and transfer ownership of it to the buyer. In New Jersey, for example, selling a $600,000 home will mean facing real estate transfer taxes of roughly $5,200. 

Some states also impose a mansion tax -- an extra fee for selling a more expensive home. The rules and thresholds here also vary by state, and some states don't impose a mansion tax. But if you're selling a high-value property, this is an important extra cost to be aware of.

If you're using a real estate agent to sell your home, they should be able to tell you what sort of fees you're looking at in transfer taxes based on where you live. Or, you can find an online calculator that helps you find that number. But either way, this is yet another expense you'll often face when you sell a home.

Don't get caught off-guard

You may be inclined to sell your home today, while prices are still high and real estate inventory is generally still pretty low. Doing so could mean snagging a nice offer. But don't start counting your money before doing the math and accounting for real estate agent fees and real estate transfer taxes.