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What it actually costs to sell, and what you'll owe on the way out
Two separate bills show up at closing: the cost of selling, and — if it was ever a rental — the tax on the gain, including the recapture piece that survives every exclusion.
Selling a house triggers two separate deductions from what a seller might assume they're walking away with, and they're easy to conflate into one vague sense that 'selling costs money.' The first is the direct cost of the transaction itself: commission and fees. The second, and only if the property was ever a rental, is tax on the gain — and it has a piece that survives every exclusion a seller might otherwise qualify for.
See the answer on the reference deal
See your net proceeds after commission, fees, and payoff. Change any number to make it yours.
Why, in full
The transaction cost, in specifics
Agent commission runs roughly 6% of the sale price nationally, typically split between the listing and buyer's agents — and it's negotiable in every state, more so since a series of 2024 industry settlements changed how buyer-agent compensation is disclosed. On top of commission, a second layer — title insurance, escrow fees, transfer taxes, and the repair credits buyers routinely negotiate — usually adds another 2-3%. All-in, budgeting 8-9% of the sale price for the cost of selling is a realistic planning number, not a pessimistic one.
On the reference deal, an 8.5% total selling cost on a $315,000 sale is roughly $26,800 before the existing $118,000 mortgage is even paid off — a number worth knowing well before a seller lists, not after an offer is already accepted.
The second bill: tax on the gain, if it was a rental
If the property was ever rented out, selling triggers depreciation recapture — tax on every dollar of depreciation claimed (or that could have been claimed), at a flat 25% federal ceiling — plus ordinary long-term capital-gains tax on the rest of the profit, plus a possible 3.8% net investment income tax, plus whatever the state charges.
Watch out — Recapture doesn't care about the §121 exclusion
The §121 primary-residence exclusion (up to $250,000 single, $500,000 married filing jointly) can shelter a large chunk of ordinary capital gain — but it never reaches depreciation recapture, and recapture is calculated first, ahead of the exclusion touching anything. A property that qualifies for the full personal-residence exclusion because the owner lived there for the required two of the last five years can still generate a real, separate tax bill for any period it was rented out along the way.
Put the two bills together and 'net proceeds' on a former rental can end up substantially lower than sale price minus mortgage payoff — commission and fees come off first, then whatever federal and state tax the gain generates. Running both calculations before listing, rather than after an offer arrives, is the difference between a number you can plan around and one that surprises you at the closing table.
Check yourself
1. Why is a naive comparison of 'mortgage payment vs. rent check' the wrong way to decide whether to buy?
2. What's the single biggest cost most sellers underestimate when they sell a house?
3. Why does depreciation recapture still apply even when a rental converts to (or was) a primary residence eligible for the §121 exclusion?