What is the closing cost for buyers and sellers?

closing cost for buyers and sellers

Regardless of whether you’re in the market to buy a home or sell one, the process of doing either can be quite confusing. Of course, you can use a mortgage affordability calculator to determine overall costs, but the paperwork alone can be overwhelming to say the very least.

As far as paperwork is concerned, if you’re signing any sort of agreement, be sure to read and fully understand the terms and conditions outlined within the agreement. Another important aspect to pay attention to is price. This is where the most mistakes happen either due to a real estate agent failing to make things clear or sheer confusion. It really doesn’t matter if the fault is yours or your real estate agent’s; in the end it is usually the buyer/seller who has to contend with the loss.

In most instances, a buyer or seller will use a real estate company to buy or sell their home. If this is the case for you, make sure you do your due diligence to ensure this company is not only legal, but reputable as well. Do an online search to read past feedback and reviews. While you’re online, check out the company’s website and read over their policies and fee structure.

Once you have found a possible company, find one or two more to compare it too. You will find that strategies and prices vary from company to company. Money is the name of the game when it comes to buying or selling a home. How much do you spend? How much can you save? Actually, let’s start with a basic question—how much are closing costs when buying or selling a home?

Closing Costs for Selling 

Closing costs are seldom thought about when selling a home as it is not as engrained within the process as it is with buying a home. However, it is important to keep in mind that closing costs are something to think about when selling your home.

Closing costs are an amalgamation of assorted fees—completely separate from a real estate agent’s commission—that is paid by both the buyer and the seller. The rate varies from state-to-state, but the standard cost usually amounts to 1-7% of a home’s purchase price.

The closing costs usually include a title search, title insurance, home inspection, appraisal, survey, credit report, transfer taxes, prepayment penalties (if any), and any outstanding amounts owed on the property. Depending on where you live, the closing cost might also include recording fees, settlement/attorney fees, and loan payoff fees.

Generally speaking, the seller of a home will pay less in closing costs than the buyer. However, the seller is usually responsible for covering the agent’s commission, as well as a portion of the property taxes. The seller will usually get a pro-rated price on the property tax bill based on how many months they lived in the residence since the beginning of the current tax year.

Closing Cost for Buying

Ultimately, the closing costs for buyers are higher than they are for sellers. Homebuyers are typically responsible for mortgage, application, and origination fees, as well as a credit report. There are a number of scams out there that target home buyers, especially first time home buyers so it is important to use caution and ensure you read and understand everything.

There is absolutely no shame in hiring an attorney that specializes in real estate to simplify all of technical jargon and explain it in an understandable format.

Buyers are typically expected to cover title insurance, as well as document recording fees also. The property appraisal is usually the responsibility of the homeowner (seller) and ultimately depends on the overall size of the home.


At the end of the day, closing costs are simply the costs associated with a home changing ownership. The costs are covered by both the buyer and the seller and while we went over what each party is expected to pay, the actual outcome can vary. Ultimately, the buyer is expected to pay the larger share, but buyers can also negotiate with sellers to get help covering the costs—this is called seller concessions. This can be quite useful, especially if a buyer is having a hard time coming up with all of the closing costs, and it can really speed up the process.

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