Closing costs can significantly impact your home sale earnings. On average, sellers might encounter total costs of 7.59% to 8.59% or more of the home’s final sale price. These expenses include realtor commissions, typically around 5.5%, and additional seller closing costs ranging from 1-2%.
However, in some cases, sellers may also choose to cover the buyer's closing costs, which can add another 1-3% to their expenses.
Our guide details the typical fees involved in closing from a seller's perspective, highlighting key expenses such as real estate commissions (paid to both the listing and buyer’s agents) and other closing costs. Understanding these fees is essential for sellers, as they can add up to a significant portion of the transaction cost.
We also explore strategies to minimize these costs, providing you with practical advice on how to save during the selling process. Whether by negotiating realtor fees or other closing costs, there are several ways to reduce your costs at closing.
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How much are seller closing costs?
You can generally expect to pay around 8% of the property’s sale price in closing costs. These costs encompass a range of fees including real estate commissions, taxes, settlement fees, and other expenses incurred during the closing of a real estate transaction
Here’s a breakdown of potential seller closing costs based on different sale prices:
| Home Sale Price | Estimated Seller Closing Costs |
|---|---|
| $150,000 | $12,000–$15,000 |
| $300,000 | $24,000–$30,000 |
| $500,000 | $40,000–$50,000 |
The actual amount of seller closing costs can vary significantly depending on several factors, including:
- State and local real estate tax rates.
- Local real estate conventions.
- Homeowners association regulations.
- Legally required closing services in your area.
- Terms of the purchase agreement negotiated with the buyer.
» LEARN: How much does it cost to sell a house?
How to reduce your seller closing costs
Realtor fees represent a significant portion of your closing costs, potentially taking a substantial bite out of your sale proceeds. One effective way to reduce these costs is by choosing a discount real estate broker.
Real Estate Witch helps you save thousands by matching you with top-rated local agents from renowned brokerages like Century 21 and RE/MAX, all while offering exclusive, pre-negotiated listing fees of only 1.5%.
⚡ Ready to cut down on realtor fees without compromising on service? Connect with a discount real estate agent near you through Real Estate Witch today!
Seller closing cost calculator
Use this seller closing costs calculator to estimate how much you'll owe in taxes and fees when you sell your home. The default values in the calculator are based on national averages. The fees you'll actually pay will depend on where you're selling.
Learn more about specific fees below, or jump down to a detailed guide to each type of seller closing cost.
What fees do sellers pay at closing?
Fees that contribute to your total home sale costs include transfer taxes, recording fees, owner's title insurance, property taxes, homeowners association fees, escrow fees, and possibly attorney fees.
Understanding who is responsible for these costs and how much they can amount to is crucial for any seller.
Here are the sellers’ most common closing costs at closing, along with how much each typically costs.
| Closing Fee | Average Cost |
|---|---|
| Realtor commission | 5.5% to 6% of sale price |
| Transfer taxes and recording fees | 0% to 1% of sale price |
| Owner's title insurance | 0.1% to 0.5% of sale price |
| Escrow fees | $500 to $3,000 |
| Seller's attorney fees | $800 to $1,500 |
| Property taxes | Varies |
| HOA fees | Varies |
What real estate closing costs actually apply to your home sale will vary by location, and how you divide them with the buyer often depends on local conventions. Your realtor can help you determine which fees and taxes will be your responsibility, as well as what they generally cost in your area.
Realtor commission fees
Realtor fees and commissions, which reward your agent and the buyer’s agent for helping you sell your home, are typically the most expensive seller closing costs. On average, realtor fees add up to about 5.5% of the property’s sale price — often more than the rest of your closing costs combined!
🚨 Important! Realtor commission changes coming soon
Traditionally, the seller covers the fees for both their own and the buyer's agents. However, this standard practice might soon change due to recent legal challenges. In November 2023, a significant lawsuit against the National Association of Realtors (NAR) contested the longstanding practice of sellers paying commissions for both parties. NAR agreed to a $418 million settlement without admitting wrongdoing.[1]
Expected to take effect in mid-July 2024, this settlement could shift the buyer’s agent commission costs from sellers to buyers, potentially reducing overall commission rates and allowing for direct negotiations over these fees. However, the implementation of these changes is pending official approval and could face delays or modifications. Check back soon for more updates.
Since realtor fees take such a huge chunk out of your sale proceeds, shopping around for a low real estate commission company could reduce your closing cost bill by thousands of dollars.
The easiest way to save on realtor fees is to work with a discount real estate broker. Real Estate Witch matches you with top-rated local agents from trusted brokerages like Century 21 and RE/MAX. You’ll also get exclusive, pre-negotiated listing fees of just 1.5%.
⚡ Looking for discount real estate agents near you? Get matched with a top local agent today!
Transfer taxes and recording fees
These costs are linked with the official transfer of property ownership. These fees can vary widely; for example, while the national average for transfer taxes is around of the sale price, some localities can charge up to 5%.
Recording fees generally average about 0.03%. Local customs often dictate whether the buyer or seller pays these taxes.
Owner's title insurance
This insurance protects the new owner from any legal problems with the property’s title that arose before their ownership, such as unpaid taxes or liens. The cost is relatively low, averaging 0.16% of the sale price.
In many areas, the buyer will pay for this insurance, though in some places, sellers are expected to cover it.
Property taxes
Sellers are responsible for any unpaid property taxes at the time of sale. This amount is usually prorated based on the time of year the property is sold. However, in some regions, the seller might be responsible for the entire year's taxes if the property is owned as of a specific cut-off date, like January 1.
Homeowners association fees
If the property is in a homeowners association, you might owe prorated fees covering your portion of the ownership period. Check your HOA agreement for details.
Escrow fees
These fees are paid to the escrow or title company that manages the closing. They typically include a base fee plus a percentage of the sale price, amounting to about 1–2% of the sale price. In most cases, these fees are split between buyer and seller.
Seller's attorney fee
In some states, closings must be conducted by an attorney, and even where it's not required, sellers might opt for legal help to navigate complex issues. Attorneys may charge a flat fee ranging from $800 to $1,500, or an hourly rate.
» MORE: Do I need a real estate attorney to sell my house?
Does the seller ever pay the buyer's closing costs?
It’s not uncommon for sellers to pay a portion of the buyer’s closing costs to facilitate a sale, a practice known as a seller concession. This strategy can be particularly effective in negotiations, making the home purchase more financially accessible for buyers.
Typically, buyer’s closing costs range from 2–3% of the home’s purchase price. By offering to cover these costs, sellers can make their property more attractive and potentially negotiate a higher sale price due to the buyer’s saved expenses.
» MORE: Learn everything you need to know about buyer closing costs
Can the buyer pay the seller's closing costs?
While it's possible for buyers to agree to pay the seller’s closing costs, this scenario is quite rare.
Sellers usually pay their own closing costs from the sale proceeds, whereas buyers need to manage their costs out of pocket, along with the necessary down payment for their mortgage.
Given the financial burden this places on buyers at closing, it’s uncommon for them to also take on the seller’s closing costs. Doing so could render the purchase unaffordable, discouraging buyers from closing the deal.
How to save on seller closing costs
There are several ways to save on seller closing costs. How much you can save depends on where you are in the home selling process.
Sell with a low commission realtor
The most substantial closing cost typically comes from real estate commissions. Partnering with a low commission realtor is an effective way to save money. Discount real estate brokers offer the same services as traditional realtors but at a fraction of the cost.
For example, by pre-negotiating with top local agents, you can secure full-service representation for just a 1.5% listing fee, potentially saving thousands of dollars.
Negotiate with the buyer
Another opportunity to reduce expenses arises during negotiations with potential buyers. In favorable market conditions, you might negotiate for the buyer to assume a larger portion of the closing costs.
While pushing for a higher purchase price rather than having buyers cover additional fees is usually more feasible, it’s crucial to understand your buyer's financial limits.
Shop around for services
As the closing date nears, consider shopping around for more affordable services related to your closing costs:
- Title insurance: If applicable, request a reissuance rate for title insurance if you've owned the home for less than ten years, potentially reducing the cost by up to 40%.
- Escrow services: Though typically chosen by the buyer, you can suggest a more cost-effective escrow service that offers a significant discount.
- Real estate attorney: If required or preferred due to complex legal issues, compare rates and services of different attorneys. Choose one based on referrals, reviews, and transparent pricing discussions.
By carefully negotiating buyer contributions and shopping around for cost-effective services, you can significantly reduce your closing costs and ensure a more profitable and smooth sale of your property
Frequently asked questions
What closing costs do buyers face?
Buyers face numerous closing fees, including for lender origination, appraisal, credit report, escrow, and mortgage recording. That's in addition to lender's title insurance and initial expenses like earnest money. Buyer closing costs can add 2% to 4% of the purchase price of the home.
What closing costs are legally required in my state?
The exact closing costs vary from state to state — even among counties and cities. Before closing, talk to your real estate agent or real estate attorney about which closing costs are required.
Does the seller have to pay the buyer's closing costs?
No, who pays for closing costs is part of negotiation. However, offering to cover a portion of the buyer's fees (also known as a seller concession) can help sellers close a deal.
Related articles
Want to learn more about how to save money on selling a home? Read these articles to learn more!
How Much Do Real Estate Agent Commissions Cost? Learn what the average real estate agent fee is by state or nationwide.
Who Pays Realtor Fees? Learn exactly why the seller tends to pay all realtor fees - and why that practice may soon change.
How Much Does It Cost to Sell a House? We break down the true cost of selling a home, including common costs like realtor commission, seller closing costs, and optional pre-sale expenses.
How to Negotiate Your Real Estate Commission and Save on Fees: One approach to saving money on real estate commissions is to directly negotiate with an agent. Read on to find sound strategies for getting a great deal from your buyer's agent.
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