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Closing Costs For Sellers To Keep In Mind

Lauren Nowacki8-Minute Read
September 17, 2021

A home buyer may be footing the bill for the sale of your home and their own closing costs, but that doesn’t mean sellers complete the transaction without financial obligations of their own. From commissions and taxes to government fees and concessions, there are several closing costs for sellers that you should be aware of and prepared to pay before you list your home.

How Much Are Closing Costs For The Seller?

Closing costs can be as high as 6% – 10% of your home’s purchase price, but you could pay less by negotiating with the buyer and your real estate agent. Closing costs for the seller are typically higher than the buyer’s closing costs, and they include any fees, taxes or related services that the seller is expected to pay at closing.

During the home closing process, a seller may have higher closing costs than the buyer depending on how they negotiated the sale of the home. The seller typically pays the commission of both the buyer’s agent and seller’s agent and may pay a part of the buyer’s closing costs per agreement – also known as seller concessions. Depending on local laws and practices, the seller may also pay additional fees.

How Do You Calculate Seller Closing Costs?

To get an accurate range of what you can expect to pay, take the lowest and highest estimated percentages of the purchase price of your home. Since sellers typically pay 6% – 10%, it’s helpful to use those numbers.

Here’s an example:

Let’s say you expect the purchase price of your home to be $200,000. Based on the average closing costs paid by the seller, you’ll likely pay $12,000 (6%) – $20,000 (10%) in closing costs.

Of course, the amount you’ll pay will depend on several factors, including how you negotiate with your agent and buyer, the location of the home you’re selling and if you have any final responsibilities to finish as the homeowner.

To help you calculate the estimated closing costs for the seller, we’ve broken down each fee that may be included in your overall closing costs.

Real Estate Agent Commissions

Real estate agent commission is the most expensive part of the closing costs you’ll pay as a seller.
When you find a real estate agent to help you sell your home, they’ll have you sign a listing agreement. As part of the agreement, the agent will spell out what you’ll pay them in commission. This is typically around 6% of the purchase price of the home. If, as allowed in some states, the agent represents both the buyer and seller in what’s known as dual agency, the agent would make the full 6% commission. If the buyer is represented by another agent, which is usually the case, the listing agent must split the commission with the buyer’s agent, meaning both agents will get 3% commission.

Property Transfer Taxes

When a property changes hands, certain actions must take place at the local or county government level. One of those actions is transferring the title of the property, which may come with a tax that’s charged by the state or local government. In most states, the seller is responsible for paying transfer taxes.

Transfer taxes are typically a designated number of dollars for every $100,000 of the property’s value or up to a certain percentage of the home’s purchase price. However, it may also depend on your property type and where you live.

Recording Fees

When a property is sold and changes hands, it must also be registered and recorded with the local government so it can be on public record. To get this done, the agency charges a fee that the seller is usually responsible for paying. Recording fees are typically charged as a flat rate and vary by location, but the national average is around $125, according to The Mortgage Reports.

Escrow Fees

Escrow helps ensure both parties are protected as they negotiate the contract and finalize the deal. Escrow is an account held by a third party that holds the earnest money deposit until the sale is finalized. By keeping the money in this account, the seller can’t take the money if the deal falls through and the buyer cannot take the deed to the home without paying the seller. It also keeps this money from being used as a pawn in negotiations.

Since both parties benefit from an escrow account, both parties pay 50% of the escrow fee.

Attorney Fees

While real estate attorneys are not required in all cases, they can be helpful in complicated deals and work to protect your interests. Some states require that an attorney be involved, so it’s important to check to see what your state laws require.

Attorney fees will vary widely depending on your location and local competitive rates. However, you can expect to pay around $150 – $500 an hour.

Title Insurance

If it’s discovered that there’s a title claim or lien on the property in the future, title insurance protects the owner of the home (or their lender, depending on the policy).

When a buyer uses a mortgage to purchase a home, the lender will require they purchase title insurance that protects the lender. Practical buyers will also consider getting title insurance that protects them as well. While the buyer pays for the lender’s, the seller typically pays for the owner’s policy, but that can be negotiated since owner’s title insurance is not necessarily required. Depending on where you live, you can expect to pay $500 – $3,500 for owner’s title insurance.

Prorated Property Taxes And HOA Fees

Prorated property taxes and HOA fees are fees paid for using the property and property’s services and amenities that the seller pays up through the date of closing. A buyer won’t want to (and shouldn’t have to) pay fees for a time they didn’t own the home and didn’t use any of the services or amenities that come with it.

Credits For Buyer Closing Costs

Sellers can also offer seller credits, which reduce the amount of money buyers must bring to the table at closing. The cost for these credits typically comes out of your sale proceeds. 

Depending on what the home appraises for, you may also be able to negotiate a higher sale price to cover the cost of the credits. This way the buyer can still come to the closing table with less cash required at no extra cost to you.

For example, if the home appraises for $205,000 and the original agreed-upon sale price was $200,000, you could agree to raise the sale price to $205,000 and offer $5,000 worth of credits. Since the home was appraised at $205,000, the buyers could bump their mortgage loan amount to $205,000 and reduce their closing costs by $5,000. It’s almost like they’re rolling their closing costs into their loan.

Any Outstanding Liens

When you take out a large loan, you may have an option to put a lien on the home to guarantee the loan will be paid back. The lien basically tells the lender that they can take ownership of the home if you don’t pay the loan back. If you have a lien on your property, you will not be able to sell it without the lienholder’s consent. Even if you get their consent, a buyer will likely not want to purchase a home that someone already has a claim to. That’s why it’s important to pay any outstanding liens you have on the property before you sell.

How Can Sellers Reduce Their Closing Costs?

While you can’t always control the types of closing costs you’ll pay, you may be able to reduce the amount of money you’ll spend. When it comes to real estate commission, you can bypass seller commissions by listing your home for sale by owner. Keep in mind, though, that the responsibility to list and market your home, show it to potential buyers and negotiate the sale will fall on you. What’s more, the seller typically still has to pay the commission – or REALTOR® fees – to the buyer’s real estate agent if the buyer has one.

You can also consider asking the buyer to help pay your closing expenses or increase the sale price to help cover the costs. These attempts may be more successful in a seller’s market, in which buyers are competing for your home.

Should Sellers Pay The Buyer’s Closing Costs?

Whether or not you should pay a portion of your buyer’s closing costs (also known as seller’s concessions) may depend on the market or your goals as a seller.

Stand Out From The Competition

If it’s a buyer’s market and you’re competing with other sellers, an offer to pay closing costs may make you stand out.

Find More Buyers

If your goal is to sell your home quickly, seller concessions may entice more buyers and open up your pool of buyers to cash-strapped home shoppers who may not have enough money to pay all of their closing costs.

Overcome Obstacles

If an inspection uncovers needed repairs that spook the buyer, you could offer seller concessions to help cover the costs of the repairs and keep the transaction moving.

What Other Expenses Should Sellers Expect?

Outside of closing costs, there are a few other major expenses you should anticipate as a seller.

Home Improvements

Home improvements can help increase the value of your home or, at the very least, make it more appealing to potential buyers. However, there’s an upfront cost to them that you’ll need to pay, whether you hire someone to make them or buy the materials to do them yourself.

Home Staging

Home staging helps highlight the best features of your home and can make your home look more attractive to buyers, both in listing pictures and in person. If you’ve already moved out of the home, it can also make the empty house look more livable. Costs that come with staging a home may include furniture rental and professional assistance.


The front yard is the first thing potential buyers will see when they pull up to the home or the first and only impression they’ll have when they drive past it. That’s why curb appeal is so important and why you may want to invest in landscaping. Costs may include general maintenance if you’ve already moved out of the home or much more in-depth work, like fixing the grading, putting in new sod or planting shrubs, flowers or other features.

Moving Costs

Once you sell the home, you’ll need to move out of it. Whether you do it yourself or hire a moving company, you’ll likely incur expenses that include moving boxes, packing materials and renting a moving van.

An Additional Mortgage

If you purchase a new home before you sell your existing home, there may be some time you’ll have to pay the mortgage on your new home and your old one until it sells.

The Bottom Line: Consider The Average Closing Costs For Sellers

When a home is sold, both buyer and seller pay a set of closing costs. While you may not be able to control all of the closing costs you’ll pay, there may be opportunities to reduce those costs. How much you’ll end up paying as the seller will depend on several factors, including where you live, how you negotiate with the buyer and your own goals as a seller.

If you’re ready to put your home on the market, sell with a Rocket Homes® Partner Agent. They’ll be able to help walk you through the sales process and better understand the costs and other responsibilities to expect when selling your home.

Lauren Nowacki

Lauren is a Content Editor specializing in personal finance and the mortgage industry. Her writing focuses on reporting the best places to live in the U.S. based on certain interests and lifestyles. She has a B.A. in Communications from Alma College and has worked as a writer and editor for various publications in Philadelphia, Chicago and Metro Detroit.