Understanding the Costs of Selling Your Home: What Will You Actually Walk Away With?

By Elizabeth Putnam, Real Estate Broker | Mosaic Community Lifestyle Realty | Asheville & Western North Carolina

Because the selling price is only part of the story. Let's talk about what actually ends up in your pocket!

So, you've decided to sell your home.

Naturally, one of the first questions you might ask is:

"How much money am I going to walk away with?"

Excellent question!

And while we can certainly calculate the commissions, closing expenses, mortgage payoff, and other fees associated with selling your home, I believe this conversation needs to begin much earlier.

In fact, I think it should begin during our very first conversation about pricing.

Why?

Because the cost of selling your home isn't just what you pay at closing. It's also what it costs you to own the home while you're waiting for it to sell.

And sometimes understanding that distinction can make a tremendous difference in the decisions you make along the way.

Let's break it down.

The Hidden Cost of Selling: Your Monthly Carrying Costs

Remember when we discussed the three primary pricing strategies in an earlier article?

• Aspirational Pricing: Testing the upper end of the market to see whether a buyer is willing to pay a premium for your home.
• Comparable-Sales-Based Pricing: Pricing in line with recent sales, current competition, and market conditions.
• Event-Sale Pricing: Creating attention through strategic pricing and a coordinated marketing launch, potentially encouraging increased buyer activity. Each strategy has advantages and risks.

But there's another factor I want my sellers to consider when choosing a pricing strategy.

How much is it costing you every month to keep the house?

Let's say you're considering aspirational pricing.

Perhaps comparable sales suggest a market value around $600,000, but you'd really like to try listing at $650,000.

Depending on your home's unique characteristics and current market conditions, that may be worth discussing.

But before we make that decision, I want you to understand what it might cost if your home sits on the market longer than expected.

What Are Carrying Costs?

Carrying costs are the ongoing expenses associated with owning and maintaining your property.

These may include:

• Monthly mortgage payments
• Property taxes
• Homeowner's insurance
• Utilities, including electricity, gas, water, and sewer
• HOA or condominium dues
• Landscaping and lawn maintenance
• Routine property maintenance
• Other recurring expenses associated with the home

Even if your home is completely paid off, you still have carrying costs.

Perhaps they're relatively modest.

Or perhaps you have substantial monthly expenses associated with maintaining the property.

Either way, we should understand those numbers.

Why Does This Matter When Pricing Your Home?

Imagine two sellers with similar properties.

Seller A owns their home outright, has relatively low monthly expenses, and isn't in a hurry to move. Seller B has a substantial mortgage payment, is already purchasing another property, and needs to sell within a relatively short period.

The best pricing strategy for these two sellers may be very different.

Seller A may feel comfortable testing the higher end of the market.

Seller B may be better served by a more competitive pricing strategy designed to attract buyers sooner.

Neither approach is inherently right or wrong.

The question is whether the strategy fits the seller's circumstances and financial goals.

That's why I believe carrying costs should be part of the pricing conversation from the beginning, not something we only discuss when an offer arrives.

Let's Do a Little Math!

I know. Math.

Not everyone's favorite part of selling a home!

But stay with me, because this example illustrates why understanding carrying costs can be so valuable.

Let's imagine you have a home listed for $100,000.

Yes, I know! Finding a house in Asheville for $100,000 would be quite the accomplishment these days.

But we're keeping the math simple.

Your home is listed for $100,000, and you receive an offer for $90,000.

You were really hoping to get $95,000.

We negotiate with the buyer, but they're holding firm at $90,000.

What should you do?

Let's Look at Your Monthly Expenses

For our example, we'll assume:

• Monthly mortgage payment: $1,500
• Utilities and other expenses: $1,000
• Total monthly cash outflow: $2,500

If you decide to reject the offer and remain on the market for another two months, you'll spend another $5,000 maintaining the property.

Now here's the question:

Do we think we're likely to receive an offer of at least $95,000 within the next 60 days?

Because if we do, that additional $5,000 in purchase price may be largely offset by the cash you've spent holding the property.

And what happens if another offer doesn't arrive?

Or if the next offer is even lower?

You may find yourself wishing you'd accepted the original $90,000 offer.

Now, to be technically accurate, not every dollar of a mortgage payment is a true expense. The portion going toward your loan principal reduces your mortgage balance and builds equity. But the entire payment still affects your monthly cash flow, which can be especially important if you're carrying two homes.

We also need to consider that the difference between the offers may affect commissions, taxes, and other transaction costs.

The numbers won't always be quite this simple.

But the principle remains the same.

What Does the Market Tell Us?

This is where I come in.

We'll look at how long your property has been listed, how many showings we've received, what buyer feedback tells us, and whether comparable homes are selling.

If the market is active and similar properties are consistently selling near our asking price, we may decide that waiting makes sense.

But if buyer activity is slow, inventory is increasing, and comparable properties are reducing prices, that changes the conversation.

The goal isn't to convince you to accept an offer you're uncomfortable with.

It's to help you understand the financial consequences of waiting. Sometimes holding out for another $5,000 makes sense. Other times, it may cost you more than you stand to gain.

And knowing the difference can help you make a much more confident decision.

Now Let's Talk About the Actual Costs of Closing

Okay, we've discussed carrying costs.

Now let's talk about those expenses that will actually come out of your proceeds at the closing table.

When I meet with sellers for an initial listing consultation, I review a document called the Seller Estimated Net Sheet.

This worksheet helps estimate what you may receive after paying the expenses associated with selling your home.

I believe it's important for sellers to understand these numbers before going on the market.

After all, knowing what your home might sell for is only half the equation.

We also need to know what you'll actually walk away with.

What Expenses Does a Seller Typically Pay in North Carolina?

Let's look at the major categories.

1. Mortgage Payoff and Other Liens

If you have an existing mortgage, that loan will be paid off from your proceeds at closing.

The closing attorney will request an official payoff statement from your lender.

This may include the remaining principal balance, accrued interest, and any applicable payoff fees.

If you have a second mortgage, home equity loan, or other liens secured by the property, those will generally need to be addressed as well.

The amount of equity you have in your home is one of the biggest factors determining your net proceeds.

2. Property Taxes and HOA Prorations

Property taxes are generally prorated between the buyer and seller according to the contract and settlement date.

This means the seller is typically responsible for the portion of the year during which they owned the property, while the buyer is responsible for their portion.

HOA or condominium dues may also be prorated.

Some associations charge additional fees for preparing account statements, processing ownership transfers, or closing out accounts.

And if you have unpaid HOA assessments or other association obligations, those may need to be paid at closing.

The closing attorney will calculate the appropriate adjustments.

3. Real Estate Commissions

Real estate commissions are another important expense to understand.

When we enter into a listing agreement, we'll discuss and agree upon the compensation paid to the listing brokerage.

Real estate commissions are negotiable. There is no legally required or standard commission rate.

As a seller, you may also choose to offer compensation toward the buyer's agent, depending on the arrangements we establish.

That decision is yours.

Both the listing brokerage compensation and any agreed-upon seller-paid buyer-agent compensation are generally deducted from your proceeds at closing.

We'll review those expenses together before signing the listing agreement so you understand what you've agreed to pay.

4. Seller's Attorney Fees

In North Carolina, attorneys handle real estate closings.

As a seller, you may have legal expenses associated with preparing and reviewing your documents and addressing the transfer of ownership.

Attorney fees vary depending on the office, services provided, and complexity of the transaction. I can share recommendations for attorneys I've worked with, but you are always welcome to choose your own legal representation.

5. North Carolina Excise Tax — Also Called Revenue Stamps

North Carolina charges an excise tax when real property is transferred.

The tax is $1 for every $500 of the purchase price, or fractional part thereof, and is generally paid by the seller.

For example:

• A $300,000 sale results in $600 in revenue stamps.
• A $500,000 sale results in $1,000 in revenue stamps.
• A $750,000 sale results in $1,500 in revenue stamps.

It's a relatively straightforward calculation, but an expense we want to include in our net proceeds estimate.

6. Miscellaneous Closing Expenses

There may be smaller expenses associated with closing the transaction.

These can include:

• Mortgage payoff processing or delivery fees
• Recording fees allocated to the seller
• Document preparation expenses
• Wire transfer fees
• Overnight delivery charges
• Other transaction-specific administrative costs

These amounts may not be significant individually, but we'll want to account for them.

7. Repairs and Seller Concessions

Remember those negotiations we discussed in our earlier articles?

Any repairs or financial concessions you've agreed to provide can affect your bottom line.

Perhaps you've agreed to replace a roof before closing.

Or maybe you've negotiated a $5,000 concession toward the buyer's allowable closing expenses.

These expenses need to be included in our financial analysis. Some repairs will be paid directly to contractors before closing, while certain costs or concessions may be reflected on the settlement statement.

We'll want to keep track of both so we understand the full financial impact of the transaction.

Let's Look at an Example: Selling a Home for $500,000

Now that we've reviewed the typical expenses, let's put everything together.

Imagine we've received an offer for $500,000.

The seller has an outstanding mortgage of $361,000.

They've agreed to pay 3% to the listing brokerage and 3% toward buyer-agent compensation.

We've estimated the attorney's fee, property tax adjustment, and miscellaneous closing expenses.

And we know the seller has agreed to replace the roof at an estimated cost of $26,125.

Here's what the numbers look like:

• Sales price $500,000
• Mortgage payoff −$361,000
• Listing brokerage compensation (3%) −$15,000
• Buyer-agent compensation (3%) −$15,000
• Seller's attorney fees −$650
• Miscellaneous fees −$100
• Estimated prorated property taxes −$3,000
• NC revenue stamps −$1,000
• Estimated roof replacement −$26,125
• Total estimated expenses −$421,875
• Estimated seller net proceeds $78,125

There we have it! Our seller has agreed to sell their home for $500,000, but after accounting for the mortgage payoff and anticipated expenses, their estimated proceeds are approximately $78,125.

That's quite a difference from the purchase price, isn't it?

Now, these are only estimates.

The actual closing statement may include additional adjustments, charges, credits, or reimbursements depending on the transaction.

And the final mortgage payoff may differ slightly from the balance we initially estimated because of accrued interest and other lender charges.

But this worksheet gives us a pretty good idea of what to expect.

Try It With Your Own Numbers

What About the Due Diligence Fee You've Already Received?

Here's one more important piece of the calculation.

Remember that due diligence fee the buyer paid you shortly after we went under contract?

That money is credited toward the purchase price at closing.

Since you've already received those funds, they aren't paid to you again.

For example, let's say the buyer paid a $2,000 due diligence fee.

Our estimated total proceeds from the transaction remain $78,125.

But because you've already received $2,000, the estimated remaining amount you'll receive at closing is $76,125.

The due diligence fee isn't an additional seller expense.

It's simply part of the purchase price you've already collected.

The Net Sheet Isn't Just for Closing Day

Here's something I want sellers to understand.

I don't consider the Seller Estimated Net Sheet to be a document we complete once and then forget about.

It's a working tool that helps us make decisions throughout the selling process.

During the Listing Consultation

We'll review an initial estimate based on our proposed listing price.

This helps you understand your potential proceeds before we bring the property to market.

When We Receive an Offer

We'll update the worksheet using the actual terms offered by the buyer.

If we're considering multiple offers, we can compare estimated proceeds alongside financing, due diligence fees, closing dates, and other important terms.

Sometimes the highest offer produces the best financial result.

Sometimes it doesn't.

During Due Diligence Negotiations

If the buyer requests repairs or concessions, we'll update our calculations again.

Let's say the buyer wants a $10,000 concession.

Before agreeing, I want you to understand what that would mean for your bottom line.

We may find that making a particular repair is less expensive.

Or perhaps offering a credit makes more sense because you have already relocated and don't want to coordinate contractors.

Every situation is different.

As We Approach Closing

Once the lender, buyer's closing attorney, and seller's attorney have finalized the necessary figures, we'll have a much more accurate picture of what you should receive.

The final settlement statement will reflect the actual charges, credits, prorations, and payoffs associated with the transaction.

Don't Forget About Pre-Listing Expenses

One additional category worth considering is the money you may spend before your home ever goes on the market. Perhaps you've painted several rooms, replaced carpeting, repaired a deck, or invested in landscaping.

Some sellers also choose to complete pre-listing inspections or appraisals.

These expenses may not appear on the final closing statement because you've already paid them.

But they're still part of your overall cost of selling.

When evaluating major improvements, I encourage sellers to consider whether the expense is likely to improve marketability, reduce buyer objections, or meaningfully affect the eventual selling price.

Not every dollar spent preparing a home produces an equivalent return.

Sometimes a relatively modest improvement can make a substantial difference.

And sometimes the best financial decision is not to renovate at all.

What About Capital Gains Taxes?

One additional financial consideration is whether you'll owe federal or state income taxes on a gain from selling your property.

This is separate from North Carolina's real estate excise tax.

Depending on how long you've owned the home, whether it has been your primary residence, your tax filing status, and other circumstances, you may qualify for a federal exclusion of some or all of the gain.

Investment properties, inherited homes, and other situations can involve different tax considerations.

Capital gains taxes generally aren't calculated on the Seller Estimated Net Sheet and typically aren't deducted from ordinary sale proceeds at closing.

I always recommend speaking with your accountant or tax advisor if you have questions about how the sale may affect your taxes.

The Best Financial Decision Isn't Always the Highest Selling Price

Let's return to where we started. Imagine you have an offer in hand, but it's less than you were hoping to receive.

You could turn it down and wait for something better.

And perhaps something better will come along!

But before making that decision, I want us to consider the entire picture.

How long have we been on the market?

Are similar homes selling?

What are our monthly carrying costs?

What would our net proceeds look like if we accepted the current offer?

And what are the potential financial consequences of waiting another month or two?

Sometimes accepting a slightly lower offer sooner can produce a better overall financial outcome than holding out for a higher price.

Other times, waiting makes perfect sense.

The right choice depends on your circumstances and what the market is telling us.

Information Is Power!

This is really what it all comes down to for me.

I want my sellers to have the information they need to make thoughtful, confident decisions.

Not decisions driven by fear.

Not decisions made because they're frustrated.

And certainly not decisions based on a number without understanding what that number actually means.

From our initial pricing conversation to the day we receive an offer, through due diligence negotiations and eventually closing, we'll continue evaluating the financial picture.

I'll provide the data, explain the options, and help you consider the potential consequences of each decision.

Ultimately, you'll determine what works best for you. Because a successful home sale isn't simply about getting the highest price. It's about achieving the best overall outcome for your particular circumstances.

And knowing your numbers is one of the best ways to get there.

Thinking about selling your home in Asheville or Western North Carolina? I'd love to help you understand your home's market value, evaluate your potential selling expenses, and develop a strategy that works for your goals.

Continue Exploring the Seller's Guide: Frequently Asked Questions About Selling a Home in Asheville.