If you’re preparing to sell your home, you probably know that buyers pay closing costs. But what many sellers don’t realize is that they also have closing costs of their own. These expenses can reduce your net proceeds, so it’s important to understand what they are and how much you should budget for.
Here’s a clear breakdown of seller closing costs—and how to prepare for them.
💰 What Are Closing Costs?
Closing costs are the fees and expenses that come due when the sale of a property is finalized. For sellers, these costs typically range from 6% to 10% of the home’s sale price (most of that being real estate agent commissions).
🏡 Common Closing Costs for Sellers
1. Real Estate Agent Commission
- Usually the largest seller expense.
- Typically 5%–6% of the sale price, split between the buyer’s and seller’s agents.
📌 Example: On a $300,000 home, commissions could be $15,000–$18,000.
2. Title Insurance (Owner’s Policy)
- Protects the buyer against title issues or ownership disputes.
- In many states, sellers are expected to pay this.
- Cost: Usually 0.5%–1% of the home’s sale price.
3. Prorated Property Taxes
- Sellers must pay property taxes up until the closing date.
- If you’ve already prepaid taxes, you may get a credit at closing.
4. Outstanding HOA Fees (If Applicable)
- If your home is part of a homeowners association (HOA), any unpaid dues must be settled at closing.
- Some HOAs also charge a transfer fee.
5. Mortgage Payoff & Prepayment Penalties
- If you still have a mortgage, part of your proceeds will go to paying off the balance.
- Some loans include prepayment penalties—be sure to check your loan agreement.
6. Attorney Fees (in Some States)
- In states where attorneys handle closings, sellers may be responsible for part of the legal fees.
- Cost: $500–$1,500 depending on location and complexity.
7. Repairs or Credits to the Buyer
- If an inspection reveals issues, you may need to:
- Pay for repairs before closing, or
- Offer the buyer a credit at closing.
8. Other Miscellaneous Fees
- Escrow fees
- Recording fees
- Courier and transfer fees
These vary depending on your location and the terms of your contract.
📊 Example: Seller Closing Costs on a $300,000 Home
- Agent commissions (6%): $18,000
- Title insurance: $1,500
- Property taxes/HOA dues: $1,000
- Attorney & other fees: $1,000
Total: $21,500 (about 7%)
✅ How to Reduce Seller Closing Costs
- Negotiate agent commissions (though this depends on market demand).
- Shop around for settlement and title services where allowed.
- Sell “as-is” to avoid repair costs (but expect a lower price).
- Ask the buyer to share costs—in some cases, buyers may agree.
🔑 Final Thoughts
Closing costs are an inevitable part of selling a property, but understanding them ahead of time helps you set realistic expectations and avoid surprises at the closing table.
👉 Before listing your home, talk to your real estate agent or attorney for a full estimate of your seller closing costs—so you know exactly how much you’ll walk away with when the deal is done.