Sell vs. Stay: The Costs That Decide It

Last reviewed October 24, 2026

Selling and staying both cost real money every year — the question is which stack is smaller. Selling now triggers commissions (~5.4–5.7% combined), seller closing costs, and possibly a taxable gain event; staying keeps a ~3–6% of home value per year holding-cost bill (maintenance, taxes, insurance, utilities) plus, in some states, an accrued tax benefit you forfeit the moment you sell.

The tax rule nobody plans for: Section 121

Federal law excludes from capital gains tax up to $250,000 of gain on a main home (single/MFS/HoH) or $500,000 married filing jointly — if you owned the home 2 of the last 5 years and lived in it as your primary residence 2 of the last 5 years (24 months need not be consecutive), and you haven't claimed the exclusion on another home in the prior 2 years (IRS Pub 523). Two traps: moving out and renting converts future gain above the exclusion into taxable gain, and depreciation recapture on post-May-1997 rentals can never be excluded (up to 25%). The 2-of-5 clock is the one deadline in this decision that has a hard date — a sell-by date that preserves the exclusion is often worth more than a few more months of appreciation.

The transaction cost of selling

Buyer-agent commission: 2.40% on average (Q1 2025, Redfin) — no longer set by MLS rules, fully negotiable.
Total commission (both sides): ~5.4–5.7% conventional (observed range, not a rule).
Seller closing costs: see our closing costs by state for how the state line moves the total.

The cost of staying (per year)

Maintenance: 1–2% of home value (newer homes) up to 4% (historic/deferred).
Property taxes: 0.5–2.5%+ of value, state-spread.
Homeowners insurance: 0.4–1.0% of value (~0.3–1.5% with flood/wind riders).
Utilities: ~$3,000–$5,400/yr; HOA $0–$3,600/yr if applicable.
Total non-mortgage holding: ~3–6% of home value per year.

Holding-cost shares are industry conventions (not statutes) consistent with our calculator defaults tables.

Two lock-in effects to check first

Rate lock-in: if your current mortgage is well below the market 30-year rate (7.03% as of the week of 2026-09-24, Freddie Mac PMMS), selling forfeits that rate and the replacement mortgage prices at market. Tax lock-in: in assessment-limit states, selling can reset your tax base:

State	Assessment cap	What happens on sale
California	~2%/yr (Prop 13)	Resets to purchase price — sellers lose the accrued cap benefit
Florida	3% or CPI (Save Our Homes)	Resets to full Just Value; sellers can port up to $500k to a new FL homestead
Michigan	CPI or 5% (Proposal A)	Uncaps to SEV the year after transfer
Oregon	3%/yr (Measure 50)	No reset — the buyer inherits the capped value
Washington	1% levy growth (I-747)	No reset — 100% annual revaluation regardless of ownership

California/Florida/Michigan rows carry a verification flag — confirm statutory cites with the state agency before making a decision on them. Verify transfer mechanics with your county assessor.

A workable decision order

1) Check your Section 121 clock first — it can create a hard deadline. 2) Price the selling side: commissions + closing costs + net proceeds via our home sale proceeds calculator. 3) Price the staying side: your 3–6%/yr holding bill. 4) Check the two lock-ins (your mortgage rate vs. PMMS; your state's reassessment row above). 5) Only then compare against what you'd pay to buy the next home — our rent-vs-buy calculator covers that half.