What are Closing Costs When Selling Your House?

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When you sell your house, certain costs go along with the transaction. These costs are called closing costs, and they can add up to a pretty penny. By understanding what closing costs entail, you can work smarter – not harder – when it comes time to sell your home and price it accordingly. What exactly are closing costs when selling your house? Here’s what you need to know.

What Does the Term “Closing Costs” Mean?

For people selling their house, closing costs refer to the various fees and expenses associated with the closing of the sale. These costs can include closing agent fees, title insurance, and transfer taxes.

How Much are Closing Costs When Selling a House?

Closing costs can vary widely depending on the sale price of your home, the location of your property, and several other factors. In general, you can expect to pay anywhere from 2-5% of the total sale price of your home in closing costs.

For example, let’s say you sell your house for $250,000. If your closing costs are 3%, you’ll need to come up with $7,500 to cover the transaction cost.

What Factors Affect Closing Costs When Selling a House?

Many factors can affect how much you’ll pay in closing costs when selling your house. These include:

The sale price of your home: In general, the higher the sale price of your home, the higher your closing costs will be. There are more fees and expenses associated with high-value homes.

The location of your property: The location of your property can affect your closing costs because certain areas have higher taxes and transfer fees than others.

The type of house you’re selling: The kind of house you’re selling can also impact your closing costs. For example, if you’re selling a condo, you may have to pay HOA fees or other assessments at closing.

The type of loan you have: The type of loan you have can influence how much you’ll pay in closing costs because some loans, such as FHA loans, have different requirements.

Typical Closing Costs for Sellers

Many things affect the closing costs you’ll pay, but there are some standard seller costs you can expect, including:

Paying Off Your Mortgage

Depending on your mortgage terms, you may have to pay a penalty for paying off your loan early. The pre-payment penalty is typically a percentage of the remaining principal. Your loan agreement might spell it out. In addition, your final payment may be higher than your last statement shows due to interest accruing until payoff. Be sure to check with your lender for an estimate of your final payment so there are no surprises when it comes time to close on your home sale.

Real Estate Agent Commissions

In the United States, the typical commission charged by a sellers’ agent is 5-6% of the home’s final selling price. You’ll pay the real estate agent commission at closing, which is generally split with the buyer’s agent.

Though it may seem like a large amount of money, using a real estate agent can save you money in the long run. An experienced agent will be familiar with the closing process and can help to ensure that you don’t overspend on closing costs. In addition, a good agent will be able to negotiate with buyers on your behalf, allowing you to get the best possible price for your home.

Selling a home can be a complex and time-consuming process. A real estate agent can take care of all the details, making the process much easier.

Attorney Fees

You may need an attorney to help with the closing process, especially if you’re selling a condo or other type of property with special rules and regulations.

An attorney can help ensure that all the paperwork is in order and that you’re following the proper procedures. In addition, an attorney can represent you in court if there are any legal challenges with the sale of your home.

While hiring an attorney may seem like an unnecessary expense, it’s important to remember that an experienced lawyer can save you a lot of money in the long run. An attorney can catch errors in the paperwork, which could lead to delays in the closing process.

Escrow Agent Fees

Closing agents, also known as escrow agents, are responsible for handling all of the paperwork associated with the sale of a home. They will also hold any money due at closing, such as the down payment until all necessary documents have been signed and the property has been transferred to the new owner.

Title Insurance

Title insurance protects both the buyer and their lender from any claims or encumbrances on the property that they are not aware of, such as tax liens or outstanding judgments against the seller.

Transfer Taxes and Recording Fees

Transfer taxes are taxes levied by the state or local government on the transfer of property ownership. These taxes are typically a percentage of the sale price of the home.

Recording fees are charged by the county to record the deed to the new owner.

Seller Concessions

A seller concession is a written agreement between the buyer and seller in which the seller agrees to pay for some of the buyer’s closing costs. This is typically done to make the property more attractive to buyers.


Selling your house doesn’t have to be a stressful experience. With a little planning and preparation, you can avoid common pitfalls and make the process as smooth as possible.

Be sure to consult with your real estate agent and attorney to get an estimate of all the closing costs you’ll be responsible for. This way, you’ll have a good idea of what to expect and can plan accordingly.

By understanding the common seller closing costs, you can ensure that you have a profitable home sale.

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