Who Pays Closing Costs, Buyer or Seller?

What sellers typically pay

Sellers generally cover the costs of transferring ownership and clearing the title to the property. The standard seller-side list:

• Real-estate commission. Historically the seller paid both sides; today the listing-side fee is in the listing agreement and any compensation to the buyer's agent is negotiated in the purchase contract.
• Transfer or deed tax in states where custom puts it on the seller. (See the state pages — the answer is genuinely different in every state.)
• Owner's title insurance in states where the seller customarily pays. In other states this is a buyer cost.
• Mortgage payoff, reconveyance fee, and any liens.
• Property-tax proration for the days the seller owned the home in the current cycle.
• HOA dues, transfer fee, and an estoppel/statement of account.
• Attorney fees in attorney-closing states, or any attorney the seller chooses to hire.
• Negotiated concessions toward the buyer's costs or repairs.

What buyers typically pay

Buyers generally cover the costs of their loan and the costs of moving into a new property. The standard buyer-side list:

• Loan origination, underwriting, and discount points. These are lender charges and vary widely.
• Appraisal and credit report fees.
• Lender's title insurance. Required by virtually every mortgage lender, and always paid by the borrower.
• Owner's title insurance in states where the buyer customarily pays.
• Prepaid interest, homeowners insurance, and escrow reserves for taxes and insurance.
• Recording fee for the deed and the new mortgage.
• Home inspection, pest inspection, survey (where applicable).
• Transfer tax in states or cities where custom puts it on the buyer.

Costs that are usually split

Some line items are routinely divided between buyer and seller:

• The settlement or escrow fee charged by the closing agent — often split 50/50 by custom.
• HOA transfer fees — sometimes assigned to the buyer, sometimes to the seller, sometimes split.
• Local transfer or recordation taxes in jurisdictions that custom-split them (e.g., parts of the Mid-Atlantic).

Why state matters more than people think

The single biggest variable is your state. In New York the seller faces a meaningful transfer-tax burden plus, for higher-priced homes, a "mansion tax" historically charged to the buyer. In Florida the seller pays documentary stamps on the deed, while the buyer pays them on any new mortgage. In California county transfer tax is small but some cities add their own, sometimes substantial, charge. There is no national default — only state and local custom, modified by what the contract says.

The contract overrides custom

Every "who pays" answer in this article is the default. The purchase contract can reassign almost any negotiable cost. In strong seller's markets, sellers often push costs onto buyers; in buyer's markets, sellers offer concessions to attract offers. The customary split is a starting point for negotiation, not a rule.

How to know your own split

Three documents will tell you exactly who is paying what for your transaction: the purchase agreement (the bargain), the preliminary title commitment or settlement statement worksheet (the closer's read of the bargain), and the final Closing Disclosure or ALTA Settlement Statement (the actual numbers). Read them line by line — that's where the real answer lives.