The Truth About Closing Costs for Sellers (And How to Save!)

By Felicia Oliver

Posted on August 11th, 2022

Do sellers pay closing costs? | Average closing costs | Closing costs by category | How to reduce closing costs

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Seller closing costs — which you pay at the end of the transaction — should be an important part of your calculations when you're trying to figure out how much you’ll make from the sale of your home.

Closing costs on a house can add up to 8-10% of a home’s final sale price — and that doesn’t include repaying debts or liens on the property. In some cases, sellers may also pay some or all of the buyer's closing costs, which can add another 2-5% to the bill.

The largest single closing cost is realtor commission, which is paid by the seller and split between the listing agent and the buyer’s agent. On average, realtor commission is 5-6%, which includes 2-3% buyer's agent commission and 2-3% in listing fees (the commission sellers pay their agent).

But, realtor commission is also the best opportunity for sellers to save thousands at closing. Our friends at Clever Real Estate have built a nationwide network of top-rated real estate agents and pre-negotiated listing fees of just 1% (rather than the standard 2-3% most sellers expect to pay).

For a $400,000 home, you'd pay just $4,000 in listing fees — just for finding a great local real estate agent through Clever.

👋 Connect with Clever's licensed concierge team to meet your personalized agent matches today!

How Much Do Sellers Pay in Closing Costs?

For sellers, closing costs are the most expensive part of selling a house.

Average closing costs for sellers add up to 8-10% of the sale price. But how much closing costs you'll actually pay depends on the laws and conventions in your local municipality, as well as what you negotiate with the buyer or seller.

Seller closing costs include fees that are paid to lenders and third parties.

What Fees Do Sellers Pay When Selling a House?

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Average Closing Costs for Sellers (8-10%)

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Biggest Seller Closing Cost Expense: Realtor Commission Fees

Realtor commission is the single largest closing cost for sellers, averaging 5-6% of the final sale price. In a typical home sale, the seller pays both the listing agent and the buyer’s agent commission.

Why does the seller have to pay a commission to the buyer’s agent? Well, think of the buyer’s agent commission as an incentive for buyer agents to bring clients to your home.

Commission is all the money a buyer’s agent makes from a sale, so if you don't offer a buyer’s agent commission, they’ll likely steer their clients to homes that do. In that sense, you’re not covering your buyer’s tab — you paid the buyer’s agent to bring a serious, qualified buyer to your listing.

Our friends at Clever negotiate discounted fees with top agents in your area so you can focus on selling your home for top dollar. You'll pay just 1% in listing fees, reducing your overall commission to around 4%.

The average Clever customer saves around $9,000, just for finding their agent through Clever's personalized matching service.

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Breaking Down Typical Closing Costs on a House

How much closing costs are can depend on where you live and the type of property you're selling. Sellers may have to pay extra closing costs for homes located in HOA neighborhoods, or if a real estate attorney is required at closing.

Transfer Taxes and Recording Fees

Transfer taxes and recording fees are what your local government charges you to officially transfer the property between parties and to legally record that transaction. These fees are paid to your city or county government.

On average, real estate transfer taxes are 0.44% of your home’s sale price, and recording fees average 0.04%. Transfer taxes vary widely, though, depending on where you live. In addition, in some places, the buyer pays transfer taxes and recording fees. Consult your real estate agent to find out how it’s handled where you’re selling.

Owner's Title Insurance

Owner’s title insurance covers the buyer in case of future legal issues connected with the home’s title, such as liens that weren’t discovered during the title search, or unpaid property taxes.

On average, owner title insurance costs 0.16% of the home’s sale price, but local rates may vary.

In some states, the owner's title insurance is the buyer’s responsibility, while in other states, the seller buys the policy. Ask your real estate agent how it’s usually done in your area!

Escrow Fees

An escrow or title company will handle the details of your home sale. This company orchestrates the actual closing of the sale, prepares and distributes the required documents, and makes sure all the money gets where it needs to go.

Traditionally, the buyer and seller split the escrow fees. Escrow companies usually charge a base fee, plus a small percentage of the final sale price. For example, an escrow company might charge a $1,200 base fee, plus 0.2% of the sale price. For a $350,000 home, that comes to $1,900.

On average, total escrow fees are around 1-2% of the final sale price but can vary depending on company rates and the demands of the sale transaction.

» MORE: All About Escrow Fee Closing Costs

Seller's Attorney Fees

Twenty-one states and Washington, DC, require that an attorney oversees the real estate closing. But even if you’re selling your home in a state that doesn’t require the participation of an attorney, it can be a good idea t to have an experienced real estate attorney look over the details of the transaction, just to make sure everything’s in order.

This is especially true if you're selling or buying without an agent, or if you have a uniquely complicated sale.

Most real estate attorneys charge a flat fee between $800 and $1,500. Others charge an hourly rate that ranges from $150 to $400 an hour.

Property Taxes

As the seller, you're responsible for property taxes up until the very last day you own the home, so you’ll have to pay a prorated property tax bill at closing.

The amount you’ll pay will depend on when in the tax year you’re selling, as well as how your local municipality collects property taxes—some collect them in advance, some collect them for the past year, and others use a quarterly tax schedule.

» MORE: Understanding Proration in Real Estate: What Is It and Who Pays?

HOA Fees

If the home you’re selling is subject to Homeowners Association (HOA) fees, you may have to pay a prorated portion of those fees at closing. Consult your HOA agreement for guidance!

» MORE: HOA Fees: Who Pays at Closing?

How to Reduce Closing Costs

At 8–10% on average, seller closing costs can take a big bite out of the profits from your home sale. The good news is there are simple, proven ways to reduce your closing costs by thousands of dollars.

Save On Seller Closing Costs With a Low Commission Agent

Commission is the single largest closing cost paid by sellers—so reducing it is the easiest way to slash your total closing costs and save money.

The emergence of the low commission realtor means you can now get a full-service, all-inclusive agent experience for a fraction of the traditional 3% listing agent commission.

Our friends at Clever Real Estate connect you with top-rated agents in your area who can sell your home fast, for low listing fees of just 1%. For a $400,000 home, you'd save $8,000 in listing fees!

Best of all, Clever's partner agents provide full service and come from trusted national brokerages including RE/MAX, Coldwell Banker, and Keller Williams. You'll save big, without sacrificing service.

💰 Find out how much you can save with Clever today!

Negotiate Closing Costs with the Buyer

Everything in a real estate transaction is negotiable, and that includes closing costs. If you’re in a strong seller’s market, you have a lot of leverage to negotiate a favorable deal—and buyers who’ve been through bidding wars and lost out on past properties might be open to your terms.

You could negotiate for the buyer to cover some or all of your closing costs, though you’ll be limited by the amount of cash the buyer has on hand, as they won’t be able to roll these concessions into the mortgage. And asking for too much could lead to bad blood — or even derail the sale.

If you’re considering trying to negotiate your closing costs with the buyer, the best thing you can do is get an experienced real estate agent to negotiate on your behalf.

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FAQs About Seller Closing Costs

What kind of closing costs do sellers pay when selling a house?

The home seller usually pays for a variety of fees upon closing, including title insurance, escrow fees, and the realtor commission for both the seller's and buyer's agent. If you want to save on closing costs, we recommend working with a low-commission real estate agent.

How much are seller closing costs?

The average seller closing costs are typically 8% to 10% of the home sale price. Agent commissions make up most of this cost at 5.5-6% of the sale price. Buyers pay 2-5% in closing costs.Learn how sellers can save thousands on closing costs!

Do sellers pay closing costs?

Typically, sellers do pay closing costs. But how much depends on the laws and conventions in your city or county, as well as what you negotiate with the buyer. Learn more about sellers paying closing costs.

How much are closing costs and what are they?

Closing costs are fees that home buyers and sellers pay to complete a real estate transaction — in addition to the sales price of the home and the mortgage down payment. Closing costs add up to about 8-10% of a home sale for sellers and 2-5% for buyers. ">Learn more about typical closing costs.

Who pays closing costs when selling a house?

Both the buyer and seller pay closing costs when selling a house. The seller usually pays more closing costs because they pay realtor commission fees for both the buyer's and seller's agents. Learn more about closing costs when selling a house.

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Posted in Closing on a House, Selling a House