When finalizing a property sale, both buyers and sellers owe a number of closing costs. For sellers, closing costs can add up to 8–10% of the home sale price — on top of repaying any debts or liens related to a property.
Realtor commissions, which the seller typically pays and are split between the listing and buyer agents, can add up to 5.5–6%. Some sellers also cover the buyers’ closing costs, which can total 2–3%.
One efficient way for a seller to save on closing costs is to choose a buyer’s agent with a lower commission. Our friends at Clever Real Estate match you with a top-rated full service agent in your area at a pre-negotiated low rate of 1.5% of your property value, saving you thousands of dollars.
This guide will walk you through the typical closing costs for sellers, identifying what they are and how you may be able to reduce some of those fees.
- In a home sale, seller closing costs are taxes and fees the seller pays to finalize the transaction and transfer ownership of the property to the buyer.
- On average, seller closing costs add up to 8–10% of your home’s sale price.
- The biggest fee you’ll pay is real estate commission — at 5–6% of the sale price, realtor fees account for more than half of your estimated seller closing costs.
- You can save thousands on closing costs by following proven strategies like shopping around for lower rates and working with a low commission realtor.
How much are seller closing costs?
In a typical home sale, the seller will pay an average of 8–10% of the property’s sale price in taxes, settlement fees, and other real estate closing costs.
Here’s how much you could expect to owe in seller closing costs, depending on what your home sells for.
|Home Sale Price||Estimated Seller Closing Costs|
However, the total amount can vary widely based on a number of factors, including:
- State and local real estate tax rates
- Local real estate conventions
- Homeowners association regulations
- What closing services are legally required in your area
- The purchase agreement you negotiated with the buyer
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?
Here are the most common closing costs that sellers face 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|
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 commission, which rewards your agent and the buyer’s agent for helping you sell your home, is typically the most expensive seller closing cost. On average, realtor fees add up to 5.5% of the sale price of the property — often more than the rest of your closing costs combined!
Since realtor fees take such a huge chunk out of your sale proceeds, shopping around for a lower commission rate could lower your closing cost bill by thousands of dollars.
The easiest way to save on realtor fees is to work with a discount real estate company like Clever Real Estate. Clever’s free service matches you with top-rated local agents from trusted brokerages like Century 21 and RE/MAX. You’ll also get an exclusive, pre-negotiated listing fees of just 1.5%. On a $400,000 home sale, finding your agent through Clever would save you $6,000!
Transfer taxes and recording fees
Transfer taxes and recording fees — sometimes called recordation, documentary, or conveyance fees — are costs associated with transferring the property’s legal ownership to the buyer. Depending on your location, you may pay these taxes to your county or municipal government (or both).
Nationally, real estate transfer taxes cost an average of 0.45%, while recording fees cost 0.03%. However, rates vary significantly between locations. In some areas, the local government doesn’t charge any transfer taxes — but in a few cities, they add up to as much as 5% of your home’s sale price!
Who pays transfer taxes varies as well. Depending on local conventions, they may be the responsibility of either the seller or the buyer.
Owner’s title insurance
Owner’s title insurance protects the buyer against unforeseen legal issues with the home’s title caused by a previous owner, such as delinquent property taxes or outstanding liens.
Title insurance is fairly inexpensive. It costs an average of 0.16% of the sale price nationwide, but rates vary between states.
Purchasing owner’s title insurance is the buyer’s responsibility in many states, but in some areas it’s common for the seller to cover the cost of the policy.
In addition to real estate transfer taxes, sellers must cover any unpaid property taxes. In most cases, your tax bill will be prorated for the portion of the year in which you actually owned the property. For example, if you owned the property for the first half of the year, you would owe half of the annual property taxes, and the rest would be the new owner’s responsibility.
However, some local governments charge the entire annual property tax bill to whoever owns the property on a specific date, for example January 1. If that’s the case in your area, you’ll owe the full year’s worth of property taxes, even if you sell your home early in the year.
Homeowners association fees
If you belong to a homeowners association (HOA), you may have to pay prorated membership dues when you close on the sale. Check your HOA agreement for details.
Escrow fees, also called settlement or closing fees, include a variety of service charges associated with finalizing the sale. The escrow or title company that oversees your closing will prepare documents, deduct closing costs from the sale proceeds, and disburse the funds on your behalf.
In most areas, the buyer and seller each pays half of the total escrow fees. Settlement companies typically charge a base fee, plus a small percentage of the sale price. For example, an escrow company may charge a $1,000 base fee, plus 0.2% of the sale value of the property. On a $300,000 home, this adds up to $1,600.
Altogether, escrow charges usually add up to around 1–2% of the sale price for conventional transactions, but fees can vary widely depending on the specific services the company provides and the complexity of the sale.
Seller’s attorney fee
In some states, real estate closings must be performed by an attorney. Even when an attorney is not legally required, it can be a good idea to hire an attorney to review your closing paperwork, especially if the transaction involves complicated legal issues such as outstanding liens or an estate sale.
Real estate attorneys often charge a flat fee per transaction ranging from $800 to $1,500. Others charge an hourly rate of $150 to $400 per hour.
Does the seller ever pay the buyer’s closing costs?
Yes, sellers sometimes agree to pay a portion of the buyer’s closing costs to help close a deal. This is known as a seller concession.
Closing cost responsibilities are negotiable, and offering to help the buyer cover their closing costs can be a valuable bargaining chip. While sellers can cover their closing fees out of the sale proceeds, buyers must pay theirs out of pocket. Offering to cover a portion of the buyer’s fees — which typically cost 2–3% of the home price — makes the initial purchase more affordable, which may help you negotiate a higher sale price.
Can the buyer pay the seller’s closing costs?
Yes, the buyer can pay the seller’s closing costs, if both parties agree to this while negotiating a purchase agreement. However, this is very uncommon, for practical reasons.
While home sellers almost always pay their closing costs out of the sale proceeds, buyers typically pay their closing costs out of pocket. This, combined with the down payment on their mortgage, requires the buyer to bring a LOT of cash to the closing table. Asking the buyer to cover the seller’s closing costs too could make the purchase unaffordable, which is why it’s rare for sellers to attempt to negotiate this concern.
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 best — and easiest — way to keep more cash in your pocket at the closing table is to sell your house with a low commission realtor.
Real estate commission is typically the most expensive closing cost you’ll pay when you sell your home. Even a small discount guarantees huge savings for most sellers.
The top discount real estate companies provide the exact same service and support as traditional realtors — but charge a fraction of the standard 3% listing fee that many agents charge.
For example, our partners at Clever Real Estate pre-negotiate exclusive discounts with top realtors at local brokerages. With Clever, you can sell with a full-service agent for a listing fee of just 1.5%, saving you thousands on closing fees!
Negotiate with the buyer
Once you’ve hired an agent, your next opportunity to save on closing costs comes when you’re negotiating with buyers. In hot housing markets, sellers have a lot of negotiating power. You may be able to negotiate for the buyer to cover a larger share of the overall closing cost responsibility than buyers in your area usually pay.
However, this typically isn’t the most effective strategy for maximizing your home sale profits. Buyers generally pay closing costs out of pocket, and they may not have a lot of free cash. In most cases, it’s easier for buyers to afford a higher purchase price than additional closing fees.
Shop around for better rates on closing fees
As your closing date approaches, you may be able to shop around for lower prices on specific closing costs. However, savings may be limited for the time and effort involved, particularly during such a busy time in your home selling process.
When you’re already juggling inspections, repair requests, and preparing for your upcoming move, you may not have time to call a dozen settlement companies to save $100 on title services.
But if you have the time and energy, here are some proven ways to save closing fees.
Request a reissuance rate on title insurance
If you’re responsible for purchasing title insurance and you’ve owned the property for less than 10 years, you can often save on this seller closing cost by requesting a reissuance rate from the title insurance company that underwrote your current policy. This means that the buyer would continue the same title insurance as the seller.
The reissue rate can cut the cost of title insurance by as much as 40%. But while those savings might sound great, title insurance is already relatively inexpensive. Even a 40% savings on a typical title insurance package only adds up to about 0.06% of the sale price of the home: on a $300,000 home, that’s only $180.
Shop around for escrow services
The cost of escrow — around 1% of the purchase price — is typically split evenly between the buyer and seller.
In most home sales, the buyer chooses the escrow company, usually based on their agent’s or lender’s recommendation. However, sellers can shop around for a low-cost escrow company and suggest it to buyers.
If you find an escrow service that saves 20% on the escrow fees, that ends up saving you around 0.1% of the purchase price of the home, or $300 on a $300,000 home.
Shop around for a real estate attorney
Real estate attorneys are required in some states and are highly recommended in all areas where the transaction may be complex. Shopping around for a real estate attorney can save hundreds of dollars.
Shop around for a real estate attorney the same way you would any contractor:
- Get referrals from your agent, friends, and family.
- Check online reviews to see how others liked their services.
- Talk to each attorney about how they’re compensated (flat fee or hourly rate) and what their rates are.
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.
Rather than viewing concessions as an extra expense, think of them as bargaining chips to negotiate a higher selling price with the buyer.
Want to learn more about how to save money on selling a home? Read these articles to learn more!
How Much Does It Cost To Sell A House By Owner? Considering handling the home selling process yourself? Before you jump in, you’ll want to know what kinds of expenses you may face when selling a home without an agent.
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.
How Can I Lower My Closing Costs? Buyers face a lot of closing costs, too! Here are some strategies for buyers to keep their costs low, which can also help sellers when negotiating a concession.
Top 12 Best For Sale By Owner Websites: We made a list of the top 12 best FSBO websites. Check out this list for all kinds of resources to make your FSBO home sale a success.
Top 2% Real Estate Commission Companies: 2022 Rankings: Getting a 2% real estate commission can save you thousands of dollars on your home sale! Read about top 2 percent commission realtors here.