Here’s Who Pays Closing Cost When Selling a House

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Here's Who Pays Closing Cost When Selling a House

When selling a home, your primary concern may be the upfront costs of repairs, renovations, and improvements necessary to make it attractive to potential buyers. However, remember the less apparent expenses of real estate transactions.

Before finalizing the agreement, you’ll need to factor in closing costs.

Regarding closing costs, both homebuyers and sellers are responsible for covering them. The amount can vary based on the house’s cost, the buyer’s chosen mortgaging type, the professionals involved in the process, and the property’s location.

As is often the case in contractual agreements, certain closing costs during a home sale may be negotiable. And while some tend to fall on one party more than another, there can always be room for discussion and compromise between both parties involved.

A young homeowner calculating the closing costs from the sale of her house.

What are Closing Costs?

When it comes time to finalize a real estate transaction, closing costs come into play. These expenses include payments for all associated services rendered throughout the process.

When buying a property, some of the borrower costs are associated with appraising the home to confirm its worth and searching for title records; other fees related to paperwork necessary for the transaction — from lawyer expenses to lender originating and underwriting fees.

The closing costs will depend on the home loan amount, type of loan (conventional loan, VA loan, USDA loan, FHA loan), and the mortgage lender.

Typically, sellers cover the real estate commission of both their agent and buyers and any transfer taxes associated with transferring ownership rights to the buyer.

If you intend to sell the property quickly, you may agree to pay closing costs in exchange for a higher sale price. Paying the closing fees allows buyers more financial flexibility when figuring out how much cash they need upfront. On the other hand, during highly competitive markets that favor sellers, you should avoid covering these costs.

Check out our article What Are Closing Costs And How Much Will You Pay? for a detailed breakdown of seller closing costs.

Do Closing Costs Differ Per State

Yes, closing costs differ per state. Here are the average closing costs by state.


  • With taxes: $2,986
  • Without taxes: $2,623


  • With taxes: $3,581
  • Without taxes: $3,581


  • With taxes: $4,701
  • Without taxes: $4,701


  • With taxes: $3,115
  • Without taxes: $2,281


  • With taxes: $7,953
  • Without taxes: $5,665


  • With taxes: $3,881
  • Without taxes: $3,806


  • With taxes: $8,821
  • Without taxes: $4,108


  • With taxes: $17,859
  • Without taxes: $3,888


  • With taxes: $8,554
  • Without taxes: $4,498


  • With taxes: $3,762
  • Without taxes: $2,863


  • With taxes: $7,463
  • Without taxes: $5,879


  • With taxes: $4,082
  • Without taxes: $4,082


  • With taxes: $5,929
  • Without taxes: $4,733


  • With taxes: $2,200
  • Without taxes: $2,200


  • With taxes: $3,146
  • Without taxes: $2,741


  • With taxes: $2,793
  • Without taxes: $2,793


  • With taxes: $2,802
  • Without taxes: $2,546


  • With taxes: $3,711
  • Without taxes: $3,386


  • With taxes: $4,420
  • Without taxes: $2,864


  • With taxes: $14,721
  • Without taxes: $4,459


  • With taxes: $7,964
  • Without taxes: $4,904


  • With taxes: $5,714
  • Without taxes: $3,511


  • With taxes: $4,011
  • Without taxes: $2,592


  • With taxes: $2,756
  • Without taxes: $2,756


  • With taxes: $2,061
  • Without taxes: $2,061


  • With taxes: $3,337
  • Without taxes: $3,337


  • With taxes: $2,781
  • Without taxes: $2,210


  • With taxes: $6,383
  • Without taxes: $4,222

New Hampshire

  • With taxes: $8,183
  • Without taxes: $2,804

New Jersey

  • With taxes: $7,915
  • Without taxes: $4,158

New Mexico

  • With taxes: $3,513
  • Without taxes: $3,513

New York

  • With taxes: $16,849
  • Without taxes: $6,168

North Carolina

  • With taxes: $3,406
  • Without taxes: $3,406

North Dakota

  • With taxes: $2,501
  • Without taxes: $2,501


  • With taxes: $4,223
  • Without taxes: $3,346


  • With taxes: $2,893
  • Without taxes: $2,507


  • With taxes: $4,327
  • Without taxes: $3,862


  • With taxes: $10,634
  • Without taxes: $4,221

Rhode Island

  • With taxes: $5,568
  • Without taxes: $3,419

South Carolina

  • With taxes: $3,447
  • Without taxes: $2,501

South Dakota

  • With taxes: $3,105
  • Without taxes: $2,843


  • With taxes: $3,911
  • Without taxes: $2,694


  • With taxes: $4,548
  • Without taxes: $4,548


  • With taxes: $4,837
  • Without taxes: $4,837


  • With taxes: $7,906
  • Without taxes: $7,906


  • With taxes: $6,346
  • Without taxes: $3,461


  • With taxes: $13,927
  • Without taxes: $4,862

Washington, D.C.

  • With taxes: $29,888
  • Without taxes: $6,502

West Virginia

  • With taxes: $3,406
  • Without taxes: $2,465


  • With taxes: $3,459
  • Without taxes: $2,692


  • With taxes: $2,589
  • Without taxes: $2,589

(Source: Business Insider)

Closing costs are slightly different in each state. Still, the real estate transfer tax rate and agent commissions are essential factors, especially for states with higher rates. Ultimately, how much you pay when closing depends on your state’s transfer fee and your real estate agent’s fee. 

Minnesota Closing Cost Inclusions

The median home value in Minnesota is $332,786. As a seller, you can expect to pay from 1% to 3% in closing costs. That is between $3,327.86 to $9,983.58.

For sellers in Minnesota, the highest cost is real estate commission fees. You’ll also be responsible for the following expenses:

  • Title service fees
  • Owner’s title insurance
  • Transfer tax
  • Recording fees
  • Buyer incentives (where applicable)
  • Variable repair costs

When a property sale in Minnesota finalizes, each buyer and seller must cover closing costs.

Sellers typically have to pay for the title and closing service fees, an owner’s title insurance policy, transfer taxes, and recording fees. However, you can add additional expenses such as buyer incentives or split property tax payments with your buyers. You can also hire a lawyer if you need one.

The buyer will pay for certain services such as mortgage and appraisal fees, inspection costs, and more.

Two homeowners sit and discuss who pays closing costs for the sale of their property.

Who Pays Closing Costs?

Sellers are typically responsible for paying realtor commissions, title fees, homeowners association (HOA) dues, and property taxes. However, deducting these expenses from the home’s purchase price is possible instead of having the sellers pay out-of-pocket at the closing table.

Most buyers need to pay additional costs on top of their purchase prices, such as attorney fees, appraisal fees, home inspection fees, credit report fee, home loan origination fees, and underwriting fees.

In addition these charges include title search and insurance expenses, prepaid interest rate, private mortgage insurance (PMI), mortgage insurance premium, and the initial payment for homeowners insurance.

A young homeowner runs the number to decide whether or not she should be the one who pays closing costs for the sale of her property.

Pros and Cons of Paying Closing Costs

When selling your home, be prepared for closing costs that will likely amount to 10% of the sale price. Agent commissions, lawyer fees, transfer taxes, and escrow charges are just a few items you’ll need to pay before the money flows in – so plan accordingly.

Pro: Seal the deal

Home sellers might cover a buyer’s closing costs for several reasons, such as if the buyer doesn’t have enough capital to pay the down payment and additional fees. A first-time homebuyer may struggle with having cash on hand for the home purchase. Offering this assistance often guarantees you’ll help the buyer save money and seal the deal successfully.

Pro: Attract buyers

To be more competitive in a buyer’s market and attract potential buyers, a seller might offer to pay for the buyer’s closing costs. Your offer could enable buyers to get closer to their desired goal of buying a new home faster.

Con: Closing costs are expensive

You’ve been offered $20,000 above the next best offer. That sounds amazing! But remember that closing costs are usually a percentage of your sales price. If you go with the higher selling price option, you’ll also be paying more in additional fees. 

Consequently, selling your house at $380,000 instead of its initial price of $360,000 might have you shelling out an additional $1,000 to $2,000 for real estate agent commissions alone.

Con: Decreased profit

Choosing to provide seller concessions may seem like a wise decision for attracting higher offers; however, it may compromise your profit margins if the offer does not turn out as expected. Though some buyers are more than willing to spend more money when you cover part of their closing costs, having no such buyer can leave you with fewer earnings.

Should I pay (as a seller) the closing costs?

In a robust buyer’s market, paying closing costs is often advantageous if the purchaser is willing to concede a higher sale price or if you need to sell rapidly.

When weighing the pros and cons of providing seller concessions, remember always to disclose any closing credits given to a buyer. Despite its potential benefits, there can be drawbacks sellers should keep in mind when deciding whether or not offering such an incentive makes sense for their situation.


Average closing costs can be up to 10% of the home sale price, so you should prepare to include that in your budget when selling your home. 

If you are trying to sell your home amid a seller’s market with limited housing inventory, requesting that the buyer pay some closing costs could be beneficial. In this intense market, buyers fight for the best properties and are often willing to bargain more than usual. As a result, you may have better luck when selling your home by accepting their offer.

When selling in a buyer’s market, prospects will likely request more concessions as fewer offers will come your way.

The best way to reduce your selling costs is to avoid paying a realtor. Regarding real estate transactions, buyers are typically responsible for closing costs, and the seller covers theirs. Seller closing costs include paying your real estate agent’s commission and the buyer’s agent fees.

Real estate agent fees can be up to 5% to 6% of your home’s sale price, so if you’re selling a $440,300 property (median value of a home in the U.S.), you’ll be paying up to $26,000 in real estate commission at closing.

If you want to save thousands on closing costs and avoid the hassle of selling your home traditionally, work with We Buy Houses For Cash. We buy houses directly from homeowners and don’t charge commissions or fees.

Contact us today for more information!

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