Closing Costs on a House: How Much Will I Pay? (2024 Update)

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By Steve Nicastro Updated February 28, 2024


Buyers and sellers are responsible for separate closing costs during a home sale. Nationwide, sellers typically incur an average of 2.73%, while buyers face expenses ranging from 3-5%. These expenses do not include real estate agent commissions, which average 5.49% nationwide, or $10,023.[1]

These costs also differ significantly based on location and home price. For instance, home sellers in California tend to encounter higher closing costs than sellers in more affordable markets like Alabama.

To reduce these expenses, buyers and sellers can explore ways to save on different closing costs and negotiate lower realtor fees. Keep reading to discover more about closing costs, including our savings tips.

What are closing costs on a house sale?

Closing costs on a house sale are the fees you must pay to complete the sale. These include charges for setting up a mortgage for the buyer and taxes for the seller. 

Sellers usually take these costs out of their sale proceeds, while buyers pay them upfront. 

The exact fees can vary greatly depending on your location and the house's cost. Here are some common ones: 

  • Loan origination fees. The buyer's lender charges fees to process and approve the loan, usually paid by the buyer. 
  • Prepaid costs. The lender requires the buyer to pay various costs, like homeowners insurance and property taxes, before settling into the house.
  • Title and settlement fees. These fees go to the company handling the sale paperwork, and they cover things like a title search to check the property's history and title insurance premiums. Buyers and sellers often split these fees.
  • Transfer taxes. When ownership changes, the state or local government might charge transfer taxes. Sometimes, these are shared, but sellers often pay for them.

It's crucial to note that realtor fees aren't included in closing costs, and are usually covered entirely by the seller.

Closing costs on a house: Full breakdown

CategoryFor sellersFor buyers
Average closing cost (%)2.73%3% to 5%
Typical closing cost ($)$9,673$10,000 to $17,000
Note: Costs are estimated based on the median sales price nationwide. 

Here's an overview of typical closing costs for both buyers and sellers.

For sellers

  • Closing costs: 2.75%
  • Typical expenses: Title insurance, transfer taxes, attorney fees
  • Average total: 9.29% or $31,871

For buyers

  • Closing costs: 3% to 5% of the home's sale price
  • Typical expenses: Loan origination fees, appraisal costs, recording fee
  • Average total: $10,000 to $17,000 of median sale price

According to Clever data, seller's total costs amount to 2.73% of the home's final sale price. For instance, on the median sale price nationwide of $354,179 this translates to $9,673.[2]

A seller's actual total cost to sell surpasses 8% of the home's final sale price when including realtor fees. When factoring in all costs, including pre-listing expenses such as home preparation and repairs, plus commission and closing costs, the total cost to sell rises to 9.24%, or $32,713.

For buyers, closing costs tend to be slightly higher due to expenses associated with obtaining a mortgage, including loan origination fees and appraisal costs. These costs typically range from 3% to 5% of a home's sale price, amounting to $10,000 to $17,000 on the median sale price. However, it's worth noting that sellers typically cover the buyer's agent fees, saving buyers 2.66%, or $9,421, nationwide.

Finally, buyers and sellers also usually split the settlement or closing fee, which can cost anywhere from $250 to $1,500.

The costs and who pays what can vary depending on your location and estimated home's sale price. Check with a realtor or a local title company for details on what's common in your area.

How much are closing costs for sellers?

Type of costTypical cost (%)Typical cost ($)
Transfer taxes.50%$1,856
Owner's title insurance0.32%$1,131
Deed recording0.03%$121
Attorney fees0.07%$247
Seller concessions to buyer2%$7,084

Seller costs vary widely; they average 2.73%, but have an average cost between $10,356 to $52,668 nationwide, depending on the sale price of the home and its location.

Seller's total costs can vary significantly, with nationwide averages ranging between $10,356 to $52,668 , depending on factors such as the home's sale price and location.

To get a more accurate estimate of their closing costs, projected sale price, realtor commission, and total net proceeds, sellers can request a seller's net sheet from a realtor.

Realtors typically provide a seller's net sheet for free during their initial listing presentation before the house gets listed. However, it can also be beneficial for estimating costs even after listing.

Below is a breakdown of potential closing costs sellers may encounter.

Transfer taxes 

Local governments, typically at the city or county level, maintain home ownership records and often levy fees or transfer taxes when properties get transferred.

The seller commonly bears these costs, which can vary significantly depending on the location. On average, they amount to , translating to approximately $0 per home sale.

Owner's title insurance

Title insurance protects homeowners if someone files a claim against the property before it was purchased. Depending on the location, the seller or the buyer may cover this cost. On average, it amounts to around 0.33% or $1,131.

During the home buying process, you may receive an itemized list of closing fees, including title insurance costs, from your settlement agent, lawyer, lender, real estate agent, or title insurance company. While these figures might not match exactly what you initially quoted in your Loan Estimate or Closing Disclosure, they don't necessarily indicate an error in the charges.[3]

Seller recording fees

Recording fees are charges imposed for recording a deed transferring property ownership. They typically amount to just 0.03% or $121 on average, paid at closing when signing final documents.

However, our data found that these costs can vary significantly, with sellers in Colorado paying only $10, while those in Maryland average $2,066, for example. 

Attorney fees

In many U.S. states, real estate transactions need to be closed by attorneys, while in others, it's optional. 

Regardless, sellers and buyers can  hire an attorney to oversee the transaction, review documents, and catch any errors or omissions that could affect the sale proceeds. 

On average, attorney fees nationwide amount to $247, but the cost may vary depending on the level of support required.

Buyer's closing costs

Buyer's closing costs can sometimes be covered by sellers, either partially or fully, depending on negotiations. The prevalence of this practice varies based on factors like market conditions, home prices, and inventory levels.

On average, sellers contribute around 2% of the home's price, amounting to approximately $7,084 for a median-priced home nationwide.

In buyer's markets, where buyers hold the advantage, sellers are more likely to cover a portion of these costs; in seller's markets with high demand and limited inventory, sellers may not offer any assistance to buyers.

Prorated property taxes

Prorated property taxes are adjustments made at closing to cover part of property taxes owed based on the time you've owned the home.

Typically, sellers credit buyers with a prorated amount to ensure fairness, as buyers shouldn't pay for taxes charged before they own the property. These taxes differ from other closing costs because they're expenses sellers would have paid anyway, regardless of the sale.

Other potential seller closing costs

There are additional closing costs that sellers might need to cover, although they may not arise in every situation and depend on individual circumstances.

  • Homeowners Association (HOA) transfer fees. These fees apply when property ownership within an HOA gets transferred from the seller to the buyer. They cover administrative expenses associated with updating HOA records and transferring ownership.
  • Home warranty fees. These are optional expenses that sellers may offer as an incentive to buyers. A home warranty provides coverage for repairing or replacing major home systems and appliances in case of normal wear and tear after the sale is completed.
  • Mortgage prepayment fees. Sellers settle their existing mortgage upon closing the home sale, using funds from the sale proceeds. In some cases, they might face a prepayment penalty for this action, particularly with recently originated mortgages (within three or five years).[4]

Still, these costs pale in comparison to realtor commissions, which average 5.49% nationwide, or $10,023. 

States with the highest seller closing costs

Massachusetts $18,328
New Jersey$16,375

States with the lowest seller closing costs

West Virginia$5,882

How much are closing costs for buyers?

The majority of the closing costs for buyers are associated with their mortgage. Additional fees may apply depending on the location and negotiations with the seller.

Typically, buyers can expect to pay between 3% to 5% of the home's purchase price in closing costs. Here are the common expenses incurred at closing.

Prepaid costs

Mortgage lenders often require buyers to prepay certain ongoing homeownership expenses at closing. These typically include property taxes, homeowners insurance, and any accrued mortgage interest from the closing date to the first mortgage payment.

Title and escrow charges

These fees encompass the cost of research and documentation to facilitate a smooth and legitimate transfer of homeownership. It also includes the settlement fee charged by the title company, escrow company, or real estate closing attorney overseeing the closing process. Usually, these charges are divided between the buyer and seller.

Lender fees

Among the most significant closing costs for buyers are lender fees, which the buyer's mortgage lender charges for originating and underwriting the loan. This encompasses various expenses associated with the loan, including appraisal fees averaging $297 nationwide, survey fees, and any mortgage points paid.

Mortgage recording fee

The buyer recording fee averages $131 nationwide, according to our data, while the Home Buying Institute reports an average cost of $125 for this fee.[5]

These charges are listed in section E on page 2 of your Loan Estimate (and section E on page 2 of your Closing Disclosure). The total of these charges and certain other settlement services can't increase by more than 10% at closing, according to the CFPB.[6]

Other buyer closing costs

Other buyer closing costs may include:

Note: These costs don't cover the expenses associated with local moving, ranging from $483 to $4,037, according to our estimates.

📣 Important: Buyers can request closing cost assistance!

Homebuyers can request seller concessions to cover part or all of their closing costs, a common practice, especially for first-time homeowners with limited cash reserves.

This option allows buyers to reduce their financial burden at closing. Sometimes, sellers may even offer to cover these costs upfront to attract more potential buyers.

Nationwide, sellers typically allocate an average of 2% toward buyer incentives, totaling approximately $7,084. However, this practice is negotiable and depends on factors like the local housing market's strength and buyer preferences.

Consult with a local real estate professional or use Clever's free agent matching tool for personalized guidance. Try Clever’s free agent matching tool here.

Sellers closing costs calculator

Try our seller closing costs calculator to estimate your potential closing expenses. 

Please note that the figures provided are based on average closing cost data and the national median home price. Actual costs may vary significantly based on your location and final sale price. 

Contact a local realtor for a personalized seller's net sheet for a more precise estimate. Clever can match you up with an experienced agent for more guidance.

How to save on closing costs

Shop around for services. Buyers can obtain quotes from multiple loan providers to find the best rate and terms. Sellers can also compare rates from attorneys and title companies to find competitive prices without compromising quality. 

However, sellers should remember that negotiating realtor fees can result in greater savings. For instance, reducing the rate by 0.50% on a $500,000 home sale could save $2,500.

Hire a discount broker. Sellers can opt for a discount broker like Clever Real Estate, which offers a pre-negotiated flat 1.5% listing fee with top agents from reputable brokerages like Keller Williams or Century 21. This allows sellers to receive quality service at a fraction of the typical cost.

Search for grants and assistance. Homebuyers, especially first-time buyers, may qualify for down payment and closing cost assistance programs to reduce out-of-pocket expenses.

For example, government housing programs through HUD, non-profit organizations, and local initiatives offer grants, loans, or subsidies to help buyers cover these costs.

Pro tip: Use the expertise of a knowledgeable local realtor and mortgage lender to identify the best home buyer programs or grants available in your area.

Get a home buyer rebate. Some real estate agents or brokers offer a home buyer rebate, also known as a commission rebate, where they share a portion of their commission with the buyer. For example, a refund of 0.50% at closing on a $350,000 home sale would result in a savings of $1,750.

Related links

Article Sources

[3] Consumer Financial Protection Bureau – "What is owner's title insurance?".
[4] Consumer Financial Protection Bureau – "What is a prepayment penalty?".
[6] Consumer Financial Protection Bureau – "What are government recording charges for a mortgage?".

Authors & Editorial History

Our experts continually research, evaluate, and monitor real estate companies and industry trends. We update our articles when new information becomes available.

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