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13 min read Apr 12, 2023

How Much are Closing Costs for Seller?

From Miami to Seattle, home sellers pay 5% to 10% of the home sale price at closing. Before celebrating the profits you’ve made from selling your house, you should calculate the fees you will pay.

Realtor fees, title insurance, taxes, and attorney fees are included in seller closing costs. Not knowing these costs could burn a hole in your pocket on the day of closing.

And by then, it will probably be too late to negotiate who will pay closing costs.

What are Closing Costs?

Closing costs are a set of expenses that must be paid as a part of the closing process. They are necessary to finalize the real estate transaction and transfer the ownership of the house.

Also known as settlement costs, closing costs vary based on the property’s market value, local and property taxes by state, type of loan, and other customary charges.

Developing an understanding of your house selling fees can help you find the right price for your property and make the closing process easier.

What is Included in Closing Costs for Seller?

The estimated home selling costs range from 8% to 10% of the final sale price of the house, not including the mortgage payoff. The biggest closing cost (5%-6%) the seller has to pay is the real estate agent commission. The remaining 3%-4% includes home inspection fee, HOA fee, estoppel fee, etc.

Property Closing Costs

1. Home Inspection Fee: $340

A home inspection pinpoints any major defects and issues that persist in the house, like plumbing issues, termites, mold, etc. Typically, a buyer agent or the buyer schedules a home inspection.

You can opt for a home inspection before the property is listed on the market (pre-inspection) or just before the closing.

The average cost of a home inspection in the U.S. is $340.

2. Home Warranty Fee

A home warranty covers the maintenance cost of the devices and appliances in the house for a limited time period. You may offer a home warranty to make the property more desirable for buyers.

The monthly cost of a home warranty usually ranges between $25-$50, depending on the plan you choose.

3. Title Search

A title search is done to determine a property’s legal ownership. To do this, a title company examines public records like deeds, tax liens, land records, court judgments, etc.

The seller typically pays for a title search. It can help discover any liens or claims on the property that even you may have been unaware of.

The title search fee for a standard single-family home may range from $100-$250.

4. Municipal Lien Search

A municipal lien search can help you uncover any unrecorded liens, code violations, permits, taxes, and utility bills, associated with the property. A municipal lien search can complement a title search as it offers additional information about open or expired permits.

An open or expired permit can be a thorn in the side for both you and the buyer, as it can lead to further expenses and delays in the sale. On average, a municipal lien search costs $200.

5. Owner’s Title Insurance

An owner’s title insurance policy protects the buyer against discrepancies related to the ownership of the property or false documentation. Additionally, title insurance takes care of any back taxes, liens, ownership clauses, etc.

The cost of an owner’s title insurance policy generally comes up to 0.5% of the property value.

6. Utility Bills

You must pay for utilities, like water, gas, electricity, etc., till the date of purchase of the house. The title company usually checks for unpaid bills and utility liens. If there are any dues, you must clear them at closing.

Mortgage Closing Costs

1. Mortgage Payoff

Mortgage payoff will most likely be one of the biggest items on your list of closing costs for the seller. You’ll have to pay off any remaining balance of the mortgage on your property with the proceeds of your home sale at closing. This includes interest accrued from the last payment to the day of closing and any penalty the lender might charge for prepayment of the mortgage.

Contact your lender and discuss the requirements to pay off the mortgage to get the overall details of your closing costs. A mortgage prepayment penalty can amount to 2% of the outstanding balance.

Administrative Fees

1. Real Estate Agent Commission

In the U.S., it is customary for the seller to pay a real estate agent commission to the listing agent as well as the buyer’s agent. Thus, you can expect to pay a realtor commission that ranges from 4% to 6% of the sales price (2% to 3% each).

You can avoid paying hefty commissions by listing your property for a flat fee. Be an FSBO (For Sale by Owner) seller and list your home with a Flat Fee MLS Service, like, to save more!

2. Attorney fees

In 21 U.S. states and the District of Columbia, it is mandatory for an attorney to be a part of the deal closure.

Sellers usually hire real estate attorneys to review the sales contract. Particularly when no real estate brokers are involved or there are any legal issues with the property. However, you can hire a real estate attorney even if your case is not unusual.

In most cases, the seller and buyer hire different attorneys to represent their best interests. However, if you and the buyer decide to hire the same attorney, the fee will be split. Real estate attorneys may charge $150-$500 per hour, depending on the location and complexity of the case.

3. Escrow fee

An escrow is a neutral third party that holds certain funds or the property until the contract conditions have been met. It protects the interest of both parties by ensuring that neither of them wrongfully back out of the deal.

Escrow companies typically charge 1%-2% of the purchase price as a fee. The escrow fee is usually split between the buyer and seller, as both parties benefit from it.

4. Settlement Fee

A settlement agent is a third-party intermediary who helps transfer the title from the seller to the buyer to complete the transaction. They prepare the closing documents. The settlement fee is the compensation paid to a settlement agent for their closing services.

Depending on the state laws, the settlement agent could be a title company, an escrow company, or an attorney.

Government Fees and Real Estate Taxes

1. Property Tax

Property tax is levied on an owned property by the governing body of the area. The owner of the house has to pay property tax according to the value of the property. You must pay prorated property tax according to the date of purchase at closing.

The national average property tax in America is 0.99% of the property value.

2. Documentary Stamp Tax/ Transfer Tax

Transfer tax is levied by the municipality, county, or state for the transfer of ownership of the house from the seller to the buyer. The tax amount is based on the market value of the property. Transfer tax or documentary stamp tax varies widely across the country.

Homeowners Association Fees

1. Homeowner Association (HOA) Fee

The HOA charges its members a monthly fee to build and maintain common areas and communal amenities in the covered area. HOA fees may range from $200-$300 per month.

If you are a part of the Homeowners Association (HOA), you will have to pay the fee due by the closing date. In most cases, you will not be able to close on the house until the fees are paid.

However, if the issue persists and is not resolved before closing, the HOA can place a lien on your house and even initiate foreclosure.

2. HOA Estoppel Fee

The HOA Estoppel letter is a legally binding document containing details about the financial obligations that the buyer will have to fulfill after closing. It also offers information about monthly fees and any unresolved dues you may owe.

You need to pay the HOA Estoppel fee as part of the process. It ranges from $100-$500.

3. HOA Transfer Fee

If you are a part of the Homeowners Association, at the time of closing, the ownership of your house needs to be transferred to the buyer in the HOA records. The HOA transfer fee is a one-time non-negotiable charge that you pay the association to update its records. It can cost $100-$400.

Who Pays Closing Costs: Buyer or Seller?

Both the buyer and seller pay certain closing costs. Some closing costs are non-negotiable, like taxes charged by your state or local jurisdiction.

The estimated closing costs for buyers can be anywhere between 2%-6% of the purchase price. However, the estimated closing costs for sellers could reach up to 8% to 10% of the final sale price of the home.

Most of the seller’s closing costs are deducted from the proceeds that they receive. As such, the seller needs enough equity to cover some of the expenses.

What is a Seller Credit?

As the seller, you can offer to help buyers with closing costs to make the property more attractive. This is called seller credit. Some scenarios in which sellers usually offer to cover a part of buyer closing costs are:

  1. Reparation for home inspection contingencies.
  2. The real estate market at the time of closing is buyer-inclined.
  3. Attract prospective buyers to sell the house quickly.
  4. Sweeten the deal if the house has been on the market for too long.

This cost is also referred to as closing credit or seller concession.

Disadvantages of Seller Paying Closing Costs

Offering seller credit may sound like a win-win situation, but it can quickly turn sour if not discussed thoroughly. Here are some drawbacks you may have to face if you choose to grant the buyer concessions without caution.

1. Higher Home Sale Price = Higher Closing Costs

It is common for sellers to raise the house sale price according to the buyer closing costs they offer as credit. Consequently, this increases closing costs covered by sellers that fluctuate with the purchase price. Some of these are real estate commissions, settlement fees, transfer tax, and real estate taxes.

2. Increased Chances of Appraisal Gap

There is an increased possibility that the property may not appraise for the new higher price. As a result, the lender may not approve the mortgage for the required amount.

In such a situation, the buyer will be forced to cover the difference out-of-pocket, effectively canceling out the benefit of seller credit. The seller would then have to renegotiate with the buyer or scrap the deal.

3. Risk of Fraud

The U.S. Government has limited the amount of concession the seller can offer to prevent the artificial inflation of real estate prices. These are based on the type of loan and the loan-to-value ratio. The seller can land in hot water if these guidelines are not followed or if their contributions are not disclosed to the mortgage lender.

What are Average House Selling Fees?

RegionClosing Costs for Sellers
NortheastSeller Closing Costs Connecticut | Seller Closing Costs Massachusetts | Seller Closing Costs New Hampshire | Seller Closing Costs New Jersey | Seller Closing Costs New York | Seller Closing Costs Pennsylvania | Seller Closing Costs Rhode Island | Seller Closing Costs Vermont | Seller Closing Costs Delaware | Seller Closing Costs Maine
MidwestSeller Closing Costs Illinois | Seller Closing Costs Indiana | Seller Closing Costs Iowa | Seller Closing Costs Kansas | Seller Closing Costs Michigan | Seller Closing Costs Minnesota | Seller Closing Costs Missouri | Seller Closing Costs Nebraska | Seller Closing Costs North Dakota | Seller Closing Costs Ohio | Seller Closing Costs South Dakota | Seller Closing Costs Wisconsin
SouthSeller Closing Costs Alabama | Seller Closing Costs Arkansas | Seller Closing Costs Florida | Seller Closing Costs Georgia | Seller Closing Costs Kentucky | Seller Closing Costs Louisiana | Seller Closing Costs Maryland | Seller Closing Costs Mississippi | Seller Closing Costs North Carolina | Seller Closing Costs Oklahoma | Seller Closing Costs South Carolina | Seller Closing Costs Tennessee | Seller Closing Costs Virginia | Seller Closing Costs Texas | Seller Closing Costs Washington, D.C. | Seller Closing Costs West Virginia
WestSeller Closing Costs Alaska | Seller Closing Costs Arizona | Seller Closing Costs California | Seller Closing Costs Colorado | Seller Closing Costs Hawaii | Seller Closing Costs Idaho | Seller Closing Costs Montana | Seller Closing Costs Nevada | Seller Closing Costs New Mexico | Seller Closing Costs Oregon | Seller Closing Costs Utah | Seller Closing Costs Washington | Seller Closing Costs Wyoming

Home Seller Closing Cost Calculator

Houzeo’s Home Sale Calculator helps estimate real estate fees for sellers with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, buyer agent commission, and voila!

The Seller Closing Cost Calculator even gives sellers an estimate of their home inspection fee and home warranty fee. With the help of this home sale proceeds calculator, sellers can find out their home equity and be prepared for closing.

» Sellers Closing Costs Calculator: Use this free Closing Cost Calculator for sellers to get an estimate of the fees for selling a house.

Value of PropertyApproximate Closing Costs for Seller
Closing Costs on a 100K House$8000-$10,000
Closing Costs on a 200K House$16,000-$20,000
Closing Cost on a 300K House$24,000-$30,000
Closing Cost on a 400K House$32,000-$40,000
Closing Cost on a 500K House$40,000-$50,000

How to Reduce Seller Closing Costs?

1. Opt for a Discount Broker or a Flat Fee Realtor.

Compared to traditional brokers, who charge 6% of the sales price as commission, discount real estate brokers only charge 3%-4%. Some low-commission realtors offer higher concessions if you let them represent you as buyer’s agents for your next real estate purchase.

» Discount Real Estate Brokers: Take a look at the discount REALTORS who can help you sell your house at a low commission.

2. Choose “For Sale By Owner”(FSBO).

Sellers can save up to 3% commission and cut several costs by opting for “For Sale By Owner” services. Houzeo offers Flat Fee MLS packages for FSBO sellers that list properties on the MLS and make the selling process easier, smoother, and pocket-friendly.

» Flat Fee MLS: Everything You Need to Know

3. Research and Compare.

You can save more cash on closing costs for sellers by opting for vendors that are more economical. Browse and ask friends who have already experienced hiring one.

How Much Will I Net From Home Sale?

RegionClosing Costs for Sellers
NortheastConnecticut Seller Closing Costs Calculator | Massachusetts Seller Closing Costs Calculator | New Hampshire Seller Closing Costs Calculator | New Jersey Seller Closing Costs Calculator | New York Seller Closing Costs Calculator | Pennsylvania Seller Closing Costs Calculator | Rhode Island Seller Closing Costs Calculator | Vermont Seller Closing Costs Calculator | Delaware Seller Closing Costs Calculator | Maine Seller Closing Costs Calculator
MidwestIllinois Seller Closing Costs Calculator | Indiana Seller Closing Costs Calculator | Iowa Seller Closing Costs Calculator | Kansas Seller Closing Costs Calculator | Michigan Seller Closing Costs Calculator | Minnesota Seller Closing Costs Calculator | Missouri Seller Closing Costs Calculator | Nebraska Seller Closing Costs Calculator | North Dakota Seller Closing Costs Calculator | Ohio Seller Closing Costs Calculator | South Dakota Seller Closing Costs Calculator | Wisconsin Seller Closing Costs Calculator
SouthAlabama Seller Closing Costs Calculator | Arkansas Seller Closing Costs Calculator | Florida Seller Closing Costs Calculator | Georgia Seller Closing Costs Calculator | Kentucky Seller Closing Costs Calculator | Louisiana Seller Closing Costs Calculator | Maryland Seller Closing Costs Calculator | Mississipi Seller Closing Costs Calculator | North Carolina Seller Closing Costs Calculator | Oklahoma Seller Closing Costs Calculator | South Carolina Seller Closing Costs Calculator | Tennessee Seller Closing Costs Calculator | Virginia Seller Closing Costs Calculator | Texas Seller Closing Costs Calculator | Washington D.C. Seller Closing Costs Calculator | West Virginia Seller Closing Costs Calculator
WestAlaska Seller Closing Costs Calculator | Arizona Seller Closing Costs Calculator | California Seller Closing Costs Calculator | Colorado Seller Closing Costs Calculator | Hawaii Seller Closing Costs Calculator | Idaho Seller Closing Costs Calculator | Montana Seller Closing Costs Calculator | Nevada Seller Closing Costs Calculator | New Mexico Seller Closing Costs Calculator| Oregon Seller Closing Costs Calculator| Utah Seller Closing Costs Calculator| Washington Closing Costs Calculator | Wyoming Seller Closing Costs Calculator

How Should I Prepare for Closing Costs?

Your settlement agent will schedule a date for your closing. By that time, you should have prepared the documents and legal paperwork needed.

1. Review Your Closing Documents Beforehand.

This is the last and crucial step of your transaction. So, it’s advisable to read and review the documents carefully and thoroughly. You must also understand the regulations and provisions stated in the deed, record, or contract.

2. Prepare Two Forms of Official I.D.

Since there will be a notary involved to verify your identification, bring a valid driver’s license or a passport. Don’t forget to take with you a secondary I.D. as a precautionary measure.

Here’s a quick checklist of important things you have to bring to the closing:

  • Government-issued photo identification (sellers on the home contract).
  • Documentation and receipts of repairs or improvements you’ve made per the home inspection.
  • The property deed (if you own it outright).
  • Home access information—main keys, security codes, garage keys, etc.

3. Ask Questions When in Doubt

Set an appointment with your closing agent before the scheduled closing date to clarify any doubts you may have. Likewise, do some extra research about your state and municipality requirements.


Developing an understanding of fees to sell a house is important for you as a seller, as it can greatly impact your profits. Additionally, it is an important factor in calculating how to price a house for sale.

If you have not begun your real estate journey yet, opt for Houzeo., a tech company, provides an unbeatable combination of maximum savings, cutting-edge technology, and 5-star customer support.

With its 100% virtual service, it helps you list your property without any hassle from the comfort of your home. It also allows home buyers explore properties and make offers online.

Houzeo’s customer-centric approach, advanced technology, and flat fee packages make it an ideal choice for those looking to avoid paying high commissions and closing costs.

» Houzeo Reviews: Is Houzeo the right choice for you? Read more!

Frequently Asked Questions

1. Is the seller responsible for any repairs after closing?

After closing, the seller can only be held responsible for repairs if they fail to reveal it in the seller disclosure. In such cases, the buyer must prove that the seller withheld the information.
If you opt for a wire transfer, you may receive the funds within 24-48 hours of the transfer by the closing agent. If you receive a check, it may take longer.

2. How long after closing date will seller receive money?

The time it takes to receive the proceeds in your account depends on the location of the house and the mode of transfer. In a wet funding state, there is a higher chance that you will get the money on the same day as the closing. This is because the buyer has access to the mortgage funds as soon as they sign the paperwork. The transfer may take up to 4 days in a dry funding state.

3. How much does it cost to sell a house?

The cost to sell a house varies according to the location, mortgage rates, and market conditions. Houzeo's closing cost estimator is a free tool you can use to get a close estimate of settlement costs.

The closing costs are deducted from the net home sale proceeds.


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