Do sellers pay closing costs? | Average closing costs | Closing costs by category | How to reduce closing costs
When selling or buying a home, closing costs are the fees you’ll pay in addition to the home’s sale price and any mortgage down payment. Sellers generally face closing costs that range from 8-10% of the sale price, while buyers can expect costs between 2-5%.
For sellers, these costs include major expenses like realtor commissions, which average between 5-6% of the sale price and are split between the buyer’s and seller’s agents.
Notably, commissions represent the largest single closing cost but also offer a significant opportunity for savings. For instance, Clever Real Estate connects sellers with top-rated agents for a pre-negotiated listing fee of just 1.5%, considerably lower than the typical 2-3%.
Imagine you are selling a $400,000 home. Through Clever, your listing fees could be as low as $6,000 instead of the usual $8,000-12,000!
đź‘‹ Connect with Clever’s licensed concierge team to meet your personalized agent matches today!
How much sellers pay in closing costs
For sellers, closing costs are the most expensive part of selling a house.
If you include realtor commission in closing costs, the average closing costs for sellers add up to 8-10% of the sale price. The actual amount you’ll pay depends on local laws, the specifics of your municipality, and the terms negotiated with the buyer.
These costs include various fees paid to lenders and third parties, which are essential to finalizing the transaction.
What fees sellers usually pay
| Closing Cost | Price |
|---|---|
| Realtor commission | 5-6% of the final sale price |
| Transfer and recording fees | Up to 1% of the final sale price |
| Title insurance | 0.1% to 0.5% of the final sale price |
| Escrow fees | $500 to $3,000 |
| Seller’s attorney fee | $800 to $1,500 |
| Property taxes | Varies (usually prorated for the year) |
| HOA fees | Varies |
One of the most substantial costs sellers face when closing on a house sale is the realtor commission, which can reach up to 6% of the final sale price. This fee is typically split between the buyer’s and seller’s agents.
Additionally, sellers are responsible for transfer and recording fees, which can total up to 1% of the sale price for handling documentation like the new deed.
Other significant expenses include: title insurance fees, which range from 0.1% to 0.5% of the sale price to protect against title issues, and escrow fees, which vary between $500 to $3,000, paid to the escrow company that manages the closing process. Sellers often also need to cover legal costs, generally ranging from $800 to $1,500 for a seller’s attorney.
Property taxes are usually prorated depending on how long the seller owned the home within the year, and if part of a homeowners association, HOA fees might also apply, covering any outstanding dues or transfer fees.
Average closing costs for sellers (8-10%)
| Sale price | Closing costs |
|---|---|
| $150,000 | $12,000–$15,000 |
| $300,000 | $24,000–$30,000 |
| $500,000 | $40,000–$50,000 |
The table above shows estimated closing costs for sellers, typically ranging from 8-10% of the home’s sale price. These costs cover expenses such as realtor commissions, legal fees, and other necessary transactions to complete the sale. Understanding these costs is crucial for sellers to effectively plan and budget for their home sale.
Realtor commission fees: A breakdown
Realtor commissions, typically the largest closing cost in a home sale, average between 5-6% of the final sale price. Traditionally, the seller pays the commissions for both the listing agent and the buyer’s agent.
However, following the recent National Association of Realtors (NAR) lawsuit settlement, sellers are no longer required to automatically pay the buyer’s agent commission. This significant change introduces more flexibility and potential cost savings for sellers.
Despite this shift, our analysis indicates that many sellers still pay the buyer’s agent commission in most cases, often through negotiations. This trend shows that even though the rules have changed, real estate deals can still be complicated. It’s important for sellers to negotiate wisely to adapt to these new guidelines.
A simpler solution to negotiating realtor fees
Clever Real Estate offers a solution by negotiating discounted fees with top local agents, enabling you to save on listing fees and potentially lower your total commission costs.
With Clever, you’ll pay just 1.5% in listing fees, reducing your overall expense. On average, Clever customers save approximately $7,000 by utilizing their personalized matching service. Choose Clever to connect with a top agent and maximize your savings while ensuring your home sells for the best possible price. Fill out this quick form to get started today!
Breaking down typical closing costs
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
These fees are what your local government charges you to officially transfer the property between parties and to legally record that transaction. They’re 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
This 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.
Use a low commission realtor
Commission is the single largest closing cost paid by sellers, so reducing it is the easiest way to reduce 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.
Clever Real Estate connects you with top-rated agents in your area who can sell your home fast for low listing fees of just 1.5%. For a $400,000 home, you’d save $6,000 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.
đź’° Find out how much you can save with Clever today!
Negotiate closing costs
Everything in a real estate transaction is negotiable, including 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 negotiating your closing costs with the buyer, the best thing you can do is hire an experienced real estate agent to do so on your behalf.
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FAQ
What kind of closing costs do sellers pay when selling a house?
Upon closing, the home seller usually pays various fees, 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!
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.