When you’re selling your home, it’s easy to focus solely on how much money you stand to make. But as they say, you have to spend money to make money — in other words, selling a house isn’t all profit. Don’t forget about the closing costs and unexpected expenses that eat into your net proceeds, leaving you with less in your pocket than you might have thought. If you’re thinking about selling your house in Arizona, here’s what you should know.
Seller’s closing costs
Closing costs are all the various expenses you must pay in order to finalize a real estate transaction. They are due at closing (hence the name) and cover everything from title insurance to attorney fees. Both the buyer and seller each have their own set of closing costs.
Closing costs in Arizona average about 1.2 percent of the home’s sale price (not including real estate commissions), according to data from CoreLogic’s ClosingCorp. But that’s not all paid for by the seller. Some common closing costs for sellers include:
- Title insurance: This protects against ownership claims or issues with the home’s title.
- Property taxes: Sellers will be responsible for being up-to-date on this expense right up to the closing date.
- HOA fees: Similarly, if the home is in a homeowners association community, you’ll need to be up-to-date on your dues up until closing day.
- Escrow fees: You may be charged modest fees to maintain an escrow account that holds funds until closing.
- Attorney fees: Arizona does not require you to hire a real estate attorney in order to sell your house. But given the complexity of a real estate transaction, not to mention the money at stake, it’s smart to do so anyway.
- Concessions: Sometimes, a seller will offer to pay some of a buyer’s closing costs to sweeten the deal. Seller concessions often include paying the cost of a needed repair, for example.
- Transfer taxes: This is a very common tax that covers the transfer of property ownership from one owner to the next. However, Arizona residents are in luck: It’s one of a handful of states that does not charge a transfer tax, so you’re off the hook for this expense.
Real estate agent commissions
As the seller, you will also be responsible for paying real estate agent commissions. These typically average between 5 and 6 percent of the home’s sale price. According to Redfin data, the median sale price in Arizona was $432,100 as of December 2023 — a 5.5 percent commission on a sale of that price would come to about $23,765.
However, commissions can sometimes be negotiated, which could save you money. And since they’re a percentage of the sale price, it all depends on how much the home sells for. Prices can vary greatly across the Arizona housing market: For example, Redfin data shows that in December the median price in Phoenix was close to the median at $444,990, which would result in about the same commission, while Tucson was lower at $323,612 and Flagstaff was higher at $680,000.
Home-prep and moving costs
When you’re ready to sell your house, any work you do to make it more appealing to buyers is also a cost you should budget for. For example, making cosmetic repairs to present the home in its best light and enhancing the curb appeal to make it more welcoming can go a long way. You may also want to have the home professionally cleaned, or maybe even professionally staged to really up the wow factor.
Don’t forget to account for the cost of the move itself, either. Once your home is sold, you’ll need to get all your stuff to your new place, and hiring movers can cost thousands (especially if you’re moving long-distance).
How much do I get from selling my house?
After all is said and done, and paid for, the same question remains: How much money will I make from my home sale? Your net proceeds is the amount you keep after you pay all of the costs and fees associated with the sale.
The amount you net will be dependent on all the factors above: It’s the sale price minus what you pay in attorney and Realtor fees, home prep costs, closing costs, taxes, etc. And if the home you’re selling still has a mortgage, don’t forget to deduct the mortgage payoff amount — that will typically be deducted from your proceeds and wired directly to the lender.
While the costs to sell a house may seem overwhelming, there are some things you can do to save money during the process.
- Negotiate commissions: Talk to your real estate agent about whether there’s flexibility in their fee. Even a small discount helps: The difference between a 6 percent and 5.5 percent commission on a median-priced $432,100 Arizona house is more than $2,000.
- Sell as-is: Skip the repairs, staging and cleaning fees to save yourself some extra cash. When you sell as-is, prospective buyers know that you won’t be paying for any upgrades or changes, so what they see is what they get.
- Compare rates: Before you commit to an attorney, title company or any other servicer, shop around to see who offers the lowest rates.
- Ask for moving help: If you have friends or family who are willing to help you pack up and bring boxes to your new place, you can save on professional moving costs.
If selling your Arizona home the traditional way isn’t right for you, here are a few alternatives to consider:
- Cash homebuyers and iBuyers: Companies that buy houses for cash provide a faster sale experience with lower fees. If you’re located in Phoenix, Prescott or Tucson you could also sell to one of the two biggest iBuyers, Opendoor and Offerpad. Keep in mind, though, that while your sale will be speedy and efficient, you will make less money than you would if you sold on the open market.
- For sale by owner (FSBO): You can always choose to sell your home yourself. This will save you a listing agent’s commission fee (you’ll still have to pay your buyer’s agent), but it’s quite a bit of work to handle on your own.
- Home equity: If you’re selling because you need the cash, consider how much equity you have in the home first. A home equity loan or line of credit might let you access the funds you need while keeping ownership of your home.
- Renting: Conversely, if you don’t need the cash from a sale right away, think about renting out your property instead. Tenants could provide a steady stream of rental income.
When you’re ready to sell your home, find a local real estate agent who is knowledgeable about your specific area in Arizona. An experienced agent will know all the ins and outs of the local market and can help you along the path to a successful, and lucrative, home sale.
As in any state, Arizona home sellers will pay Realtor commissions and closing costs, as well as any expenses to prep the home for the market, like repairs or professional cleaning. One thing they do not have to pay is transfer taxes: Arizona does not have a real estate transfer tax, so you’re off the hook for this common closing cost.
Yes you can. However, selling without the help of a pro real estate agent is a lot of work, as you have to handle all the responsibilities yourself, including analyzing the market to set the correct asking price, creating a listing, coordinating showings and negotiating contract terms. You’ll also need to navigate the closing paperwork and process on your own. If you choose to sell without an agent, it’s wise to have a real estate attorney look over all your paperwork and make sure your interests are covered.