Minnesota Seller Closing Costs in 2021: How Much Will You Pay?

Jamie Ayers


Jamie Ayers

March 6th, 2021
Updated March 6th, 2021


Many sellers forget to factor in closing costs when estimating how much they’ll take home. Then the expenses quickly add up. To ensure you’re not left in the lurch, read on to learn what closing costs you can expect and how much you’ll pay when selling your Minnesota home.

How Much Are Closing Costs for Sellers in Minnesota?

During the closing process, both the seller and the buyer will be expected to pay closing costs. As the seller, your closing costs typically add up to 1% to 3% of the sales price. Buyers don’t have it so lucky as they’ll be shelling out 3% to 4% in closing costs.

However, on top of closing costs, when your sale finalizes, you as the seller are also responsible for commission fees that average 6% in Minnesota.

Fortunately, you can reduce your selling costs by working with a top-rated, low-commission agent who will sell your home quickly and for top dollar — but at a fraction of the usual commission price.

Get in touch with a top-rated, experienced real estate agent for a free, no-obligation consultation and learn how they can help you save up to 50% on commission fees at closing.

To help you navigate and know exactly what to expect when it’s time to close on your home, here’s everything you need to know about Minnesota closing costs.

What are closing costs?

Closing is the last phase of the selling process when all documents are finalized and ownership of your home is officially transferred to the buyer. A third-party representative from an escrow company will oversee the entire closing process to ensure all paperwork and payments are handled properly.

The documentation and services involved in closing aren’t free; both you and the buyer will be responsible for paying an assortment of fees known as closing costs.

As the seller you can expect your closing costs to mainly cover expenses for the property transfer while the buyer’s closing costs will mostly relate to lender fees.

How much are closing costs in Minnesota?

Typically, total closing costs can add up to 7% of the sales price. As the seller, you can expect to pay anywhere from 1% to 3% in closing costs. The buyer, who bears the brunt of closing costs, will shell out between 3% and 4%.

But you don’t want to celebrate too early. While your closing costs are lower than the buyer’s, you’ll still need to pay commission fees at closing which can tack on an additional 6%.

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How to Calculate Your Closing Costs in Minnesota

So how much can you expect to pay in closing costs? The formula is simple: multiply your home price by the closing cost percentage — 1% to 3%.

As an example, the median sales price of Minnesota homes is $235,500 as of August 2019. Using this sales price, the closing costs would range anywhere between $2,355 and $7,065 for most Minnesota homeowners.

And don’t forget the commissions you’ll pay at closing. Assuming a 6% commission rate, that would tack on another $14,130.

What’s included in Minnesota closing costs?

While typically you and the buyer each pay for specific closing costs, like most things in real estate, who pays which closing costs is negotiable. So in the case the buyer asks you to cover a portion of their closing costs, it’s essential to be familiar with all the closing costs in a real estate transaction.

Title Search: $300

Requested by the buyer’s lender, a title search ensures the title is clear. The search affirms you’re the true owner of the property and there are no liens or issues with the home.

Title Insurance: $1,000

Title insurance protects the buyer and their lender from any future financial loss due to unexpected issues with the property’s title.

Home Inspection: $286 to $383

Before closing, the buyer typically requests a home inspection to determine if there are any major problems with your home.

Appraisal: $338 to $386

Required by the buyer’s lender, an appraisal verifies the worth and value of your property.

Survey: $450

A survey determines your property’s boundaries and building locations.

Credit Report: $25

This fee covers the charge for a lender to pull the buyer’s credit history and credit score.

Loan Payoff Costs: 0.5% to 1.5% of the sales price

Loan payoff costs relate to any fees associated with the buyer’s loan including application fees, prepaid interest, and loan origination fees for the buyer.

Mortgage Payoff/Prepayment Penalty: Varies depending on your lender

If you haven’t yet paid off your entire mortgage, closing is when you’ll be responsible for paying off the remainder that you owe. And depending on your lender, you may be charged a penalty if you pay off your loan before the end of your mortgage’s term.

Outstanding Amounts Owed on the Property: Varies

You’ll be responsible for any outstanding payments related to your property which can include prorated property taxes, unpaid homeowners association dues, utility bills, and homeowner’s insurance.

Transfer Taxes: 0.33% of the net consideration

Transfer taxes are issued by the state to transfer the deed of your property to the buyer. In Minnesota, you pay 0.33% of the net consideration, meaning the price of the home. Additionally, if you live in Hennepin or Ramsey counties you’ll be charged an extra 0.01% for an Environmental Response Fund (ERF) tax.

> Learn more about Minnesota transfer taxes: Minnesota Real Estate Transfer Taxes: An In-Depth Guide.

Recording Fees: Varies by County

This fee is to register the sale and transfer of your property which will be part of public record. The cost does vary by county but as an example, in Washington County recording fees cost $46.

Settlement Fees: $2 per $1,000 in sales price

While Minnesota doesn’t require an attorney present at closing, you’ll still need a representative from an escrow company to oversee the closing process. The settlement fee covers the services provided by the escrow company on closing day.

Other Home Selling Costs in Minnesota

For many sellers, the cost to sell their home is more expensive than they initially anticipated. And closing costs are only one expense you’ll need to factor in when selling your home. Another hefty expense you’ll want to consider are home improvements and repair costs.

While hopefully the inspection only turns up minor issues such as adding more smoke detectors or fixing a leaky faucet, if more serious issues arise like foundation problems or water damage, your repair costs or seller concessions can add up quickly.

Keep in mind, you’ll also have to cover needed home preparation costs before you list your home on the market. You’ll want to factor in costs for prepping and staging your home as well as landscaping or storage expenses.

However, the most expensive cost of selling your home will likely be commission fees. As the seller, you’ll be responsible for both your agent’s commission as well as the buyer’s agent’s commission.

Typically, the standard commission cost in Minnesota is 6% of the sales price, split between the two agents with each typically walking away with 3%. For example, the median sales price of Minnesota homes is $235,500 and with a 6% commission rate, you’ll be paying around $14,130 in realtor fees.

> Learn more about how much it costs to sell a house in Minnesota

Who pays closing costs in Minnesota?

Typical Seller Closing Costs

As the seller your 1% to 3% in closing costs generally cover any expenses surrounding the transfer of ownership along with any outstanding payments on the home. Here are the closing costs you can expect to cover:

  • Transfer fees
  • Title insurance for the buyer
  • Attorney fees
  • Mortgage payoff and any penalty fees for prepayment
  • Escrow fees
  • Recording fees
  • Other amounts owed like HOA fees, property taxes, and utilities

Typical Buyer Closing Costs

The buyer will be looking at steeper closing costs ranging from 3% to 4%. Their closing costs typically revolve around the lender and any loan fees. Here is what the buyer can expect to pay in closing costs:

  • Title search fee
  • Appraisal fee
  • Credit report fee
  • Home inspection
  • Lender’s title insurance
  • Survey fee
  • Origination fee
  • Underwriting fee
  • Settlement/escrow fees
  • Prepaid interest
  • Recording fees

Should you pay the buyer’s closing costs?

While paying for the buyer’s closing costs may seem counterintuitive as ideally, you want to walk away from the sale with as much money as possible, offering to cover those costs can be beneficial to you.

Helping out with the buyer’s closing costs can help ensure the sale goes through. As buyers tend to pay more cash upfront in a real estate deal (e.g. down payment, mortgage, insurance), coming up with all the funds can be difficult.

By offering to pay for a portion of their closing costs, you’ll help ease the buyer’s financial strain and bring more buyers to the table.

Paying for the buyer’s closing costs can also work to your advantage during a buyer’s market when selling a home quickly and for a higher price can be challenging. If a buyer sees you’re willing to help with closing costs, it may be the deciding factor between choosing your home over another.

Key Takeaways for Minnesota Home Sellers

The costs to sell your home can sneak up on you. Between prepping and staging for open houses, sprucing up your curb appeal, repairing and improving the home, and paying commission and closing costs, the cost to sell your home can add up quickly.

To help you better anticipate what to expect when selling your home, it’s smart to partner with an experienced real estate agent or real estate attorney who can help you navigate closing costs along with all your other selling expenses.

And if you’re hoping to keep costs down, Clever can help! Clever will connect you with a top-rated, full-service Partner Agent who works for a flat listing fee of $3,000 or 1% if your home sells over $350,000, saving you thousands in commission.

Get in touch with an experienced, local Partner Agent for a free, no-obligation consultation and see how much you’ll save when selling your Minnesota home.

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