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

Clever Real Estate


Clever Real Estate

March 6th, 2021
Updated March 6th, 2021


In addition to realtor commission fees, sellers in New Jersey pay 1-3% of their home’s sales price in closing costs. Here, we’ll go over each of these fees to give you a better idea of what you’ll need to pay.

How Much Are Closing Costs for Sellers in New Jersey?

Closing costs are expenses that buyers and sellers pay when finishing up, or “closing on”, a home sale.

These expenses are calculated on top of realtor commission fees, which average 6% in New Jersey, and include costs like title searches, home inspections, appraisals, and recording fees.

Closing costs can total anywhere from 1-7% of a home’s final sales price, but sellers usually pay only 1-3% in New Jersey.

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For now, here’s what you need to know about closing costs in New Jersey.

What are closing costs?

To start, let’s define “closing”.

Closing is the part of the home selling process during which the final paperwork is signed, money is exchanged, and ownership is transferred from seller to buyer. Generally, the seller will pay off any outstanding loans, the buyer will pay their balance, and an escrow agent will aid in the transfer of any other payments or documents between all parties.

Closing costs are simply the fees and expenses associated with this process. In New Jersey, sellers typically pay 1-3% of the final sales price in closing costs in addition to the 6% realtor commission fee.

So, what exactly are you paying for? Typical closing costs include:

  • Title search
  • Title insurance
  • Home inspection
  • Appraisal
  • Survey
  • Credit report
  • Loan payoff fees
  • Settlement or attorney fee
  • Transfer taxes
  • Recording fees
  • Mortgage payoff or prepayment penalty
  • Outstanding amounts owed on the property

That’s a lot. But don’t worry, we’ll break each of these down later on. For now, let’s take a look at what you can expect the total damage to be.

How much are closing costs in New Jersey?

In New Jersey, the closing costs typically total 1-7% between both buyers and sellers.

New Jersey sellers can usually expect to pay 1-3% of the final sales price in closing costs, and buyers can expect to pay around 2-5%.

While sellers can deduct the expenses from their sale’s proceeds (assuming they have enough equity), buyers need to pay out of pocket.

Buyer closing costs generally relate to getting their mortgage approved and seller closing costs generally cover services that transfer the property ownership.

How to Calculate Your Closing Costs in New Jersey

To get a better idea of what all this means for you in concrete terms, let’s take a look at an example.

According to Zillow, the 2019 median home sales price in New Jersey is $294,600. That means that you can expect to pay somewhere between $2,946 (1%) and $8,838 (3%) in closing costs on a typical New Jersey home sale.

Some closing costs, such as transfer taxes and recording fees, will vary from county to county, so check your local laws or ask your realtor to get a more precise estimate.

What’s included in New Jersey closing costs?

Let’s put closing costs under the microscope and look at each expense, one by one.

Title Search: $250-$500

A title search checks for any liens on the property. In short, it insures that the current seller has full rights to sell the property. The cost of a title search can vary depending on the sales price, but it typically runs around $250-$500 in New Jersey, according to Berkeley Heights Real Estate.

Title Insurance: $1,000

Title insurance protects buyers and lenders against title issues that they were unaware of at the time of the purchase. This means that if six months after closing, someone shows up claiming the rights to the property with documents to prove it, the title insurance will reimburse any associated financial losses.

Title insurance will typically cost $1,000, according to

Home Inspection: $300-$900

A home inspection checks for any issues with the home’s physical condition. This can include foundational problems or issues with appliances and systems. A New Jersey Home inspection will cost approximately $300-$900 according to Berkeley Heights Real Estate.

Appraisal: $400-$600

An appraisal is performed to confirm that the home is worth the amount the buyer is borrowing from the lender. If the appraiser determines the house is worth less than the desired mortgage amount, the buyer will not be able to secure financing as the lender will deem the house insufficient collateral.

A typical appraisal will cost $400-$600 according to Sue Adler Team.

Survey: $450-$800

A survey determines the legal boundaries of the property, also known as the property lines. The typical cost is $450-$800 according to Berkeley Heights Real Estate.

Credit Report: $20-$50

Lenders run credit reports to determine the credit worthiness of a buyer. Credit reports can be carried out by Experian, Equifax, or TransUnion.

This will generally cost about $20-$50, according to

Loan Payoff Costs: 0.5-1.5% of the Closing Price

Loan payoff costs include application, assumption, loan origination, and prepaid interest fees.

You should budget for 0.5-1.5% of the closing price, according to Money Crashers.

Mortgage Payoff/Prepayment Fees: Variable

When you sell your home, you’ll pay off the remaining mortgage balance before closing. Depending on your lender, you may be required to pay a penalty for paying off your loan before the end of the mortgage term. The fees for this will vary from lender to lender, so check with yours to find out if you’ll be subject to this expense.

Outstanding Amounts Owed on the Property: Variable

If you have any outstanding balances for homeowners insurance, property taxes, utility bills, or HOA fees, they’ll be prorated to the closing date and you’ll be required to pay them AT closing.

Transfer Taxes: Variable

In New Jersey, sellers are typically required to pay real estate transfer taxes. While most states have a fixed-rate for transfer taxes, New Jersey uses a bracket system that increases the rate at different price thresholds.

For an in-depth look at New Jersey transfer taxes, click here.

Recording Fees: Variable

At closing, the deed for the property will be filed with the local county office. The fee for this varies from county to county, so check your local regulations or ask your realtor to get a better idea for how much you’ll need to pay.

Settlement or Attorney Fee: $1,500-$2,200 or $2 per $1,000 in sales price

If an attorney assists you in closing on your home, you will need to pay an attorney fee. This typically costs between $1,500-$2,200 in New Jersey, according to Berkeley Heights Real Estate.

If closing is handled by an escrow or title agent, you will need to pay approximately $2 per $1,000 in sales price, according to Money Crashers.

Mansion Tax: Variable

If you buy a home for more than $1,000,000, you will need to pay the New Jersey Mansion Tax. This tax costs 1% of the total purchase price.

NJ Exit Tax: 2% of Closing Price or 8.97% of Net Profit

New Jersey requires sellers to pay either 2% of the closing price or 8.97% of their net profits before or at closing time. However, it’s important to note that this is not an additional tax. Rather, it is simply a prepayment of the income tax you’d normally need to pay in April regardless.

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Other Home Selling Costs in New Jersey

In addition to the aforementioned closing costs, sellers will need to pay for presale improvements, repair costs if any problems turn up during the inspection, and realtor commission fees.

The price of repairs and improvements will vary depending on the condition of your home. Homes with serious foundational issues can incur hefty repair fees or require large repair credits, while well-maintained houses will only have modest repair costs, if any.

Realtor commission fees in New Jersey generally total 6% of the home’s closing price, split between the buyer’s and seller’s. To entice buyers to make a purchase, the seller is expected to pay both agents’ commission fees.

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

Who pays closing costs in New Jersey?

Buyers and sellers each have their own unique closing costs to pay. Here’s a breakdown of who pays what:

Typical Seller Closing Costs

Sellers need to pay for transfer taxes, a title search, and other fees related to verifying ownership, transferring the property, and paying off outstanding balances. These include:

  • Transfer taxes
  • Title search
  • Title insurance (for the buyer)
  • Loan payoff costs
  • Mortgage prepayment penalties
  • Outstanding amounts owed on the property
  • Attorney or settlement fees

Typical Buyer Closing Costs

Buyers need to pay closing costs that relate to the origination of a loan, credit checks, and new insurance policies. These expenses include:

  • Title insurance (for the lender)
  • Home inspection
  • Appraisal
  • Survey
  • Credit report
  • Recording fees
  • Settlement or attorney fees
  • Mortgage origination fees
  • Mansion tax

Should you pay the buyer’s closing costs?

In some cases, sellers may offer to pay some of the buyer’s closing costs. Typically, this is done to entice a buyer into a sale. In a very hot seller's market like New Jersey, this is usually not necessary and not recommended.

However, if you are having trouble negotiating a deal with the buyer, it can be helpful to offer to pay for a few of their closing costs. This is referred to as a seller concession.

Sellers can pay for all buyer closing costs in New Jersey, but individual lenders may impose limits on how much a seller can contribute to a buyer’s lender fees.

Key Takeaways for New Jersey Home Sellers

Sellers in New Jersey will need to pay 1-3% of the sales price for closing costs in addition to the typical 6% realtor commission fee. These fees include a title search, transfer taxes, mortgage prepayment penalties, and the New Jersey Mansion Tax, if applicable.

Before selling your home, make sure you consult with an experienced, local real estate agent, tax advisor, or attorney to get a better idea of how much you should budget for.

Luckily, there are ways to save big on realtor commission fees, lowering the overall cost of selling a home by as much as 29%.

Clever connects sellers with top, local agents who offer their services for a fraction of the typical price.

Get in touch to schedule a free, no-obligation consultation and learn how you can save thousands on realtor commission fees.

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