What closing costs does a home seller pay?

Key takeaways

• Sellers are responsible for paying certain closing costs, sometimes called settlement fees, before a home sale can be finalized. These typically include transfer taxes, title insurance, closing agent fees, prorated property taxes, mortgage payoffs and agent commissions. 
• Excluding commissions, seller closing costs generally range from 1% to 3% of the sale price. With commissions included, total costs can reach 6% to 10%. 
• Transfer taxes, title insurance practices and who pays what vary widely by state and even by county, making local research essential before listing. 

Closing is the final step in selling a home. While sellers often sign the paperwork ahead of time, they are responsible for paying several fees before the deal is done. Some of these costs are set by state or local law, while others are negotiable between buyer and seller.

Understanding each line item can help you estimate your net proceeds and avoid surprises on closing day. Here is a breakdown of what sellers commonly pay, how costs vary by location and how concessions work.

Related content:

• Selling a home in 10 steps 
• The cost of selling a home in 2026 

Seller closing costs are the combined fees, taxes and expenses deducted from your sale proceeds at the end of a real estate transaction. They cover everything from transferring the property title to paying off your existing mortgage balance.

According to Bankrate's analysis of LodeStar Software Solutions data, the national average for closing costs (excluding agent commissions) is approximately 1.6% of the home's sale price. When you add agent commissions, the total seller cost can reach 8% to 10% of the sale price.

Here is a summary of the main costs sellers can expect:

Sources: Urban Institute analysis of Fannie Mae data (2025); National Association of Realtors; LodeStar Software Solutions data via Bankrate. Agent commission ranges reflect industry standards. Actual costs vary by state, county and transaction.

Transfer taxes are one-time taxes that the state or local government, or both, levy when a property changes hands. The tax rate is usually based on the sale price and varies widely by location.

For example, the rate in most parts of Colorado is a penny for every $100 of value, while Florida charges 70 cents per $100. In Miami-Dade County, Florida, the rate is 60 cents per $100.

Fourteen states do not have a statewide transfer tax, according to the National Association of Realtors: Alaska, Idaho, Indiana, Louisiana, Kansas, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon (most counties), Texas, Utah and Wyoming.

Even when a state has a set rate, individual counties or cities may add their own. Most states and local governments set a uniform rate for all properties, but a few use a graduated rate based on the sale price, according to the George Washington Institute of Public Policy at George Washington University.

Typically, the seller pays transfer taxes, but this can be negotiable depending on local customs and the terms of the purchase agreement.

In a few states and cities, high-end home sellers pay an additional transfer tax on top of the standard rate. These are sometimes called "mansion taxes."

Los Angeles: The city's Measure ULA imposes an additional tax on property sales above certain thresholds. Effective for transactions closing after June 30, 2026, the new ULA thresholds will be $5.4 million and $10.9 million. Transactions greater than $5.4 million but less than $10.9 million will be assessed a 4% tax, and transactions of $10.9 million or greater will be assessed a 5.5% tax. These thresholds are adjusted annually based on the Consumer Price Index.

New York City: A mansion tax has applied since 2019 to sales over $3 million, according to the New York State Department of Taxation and Finance.

Sellers in high-cost markets should check their city and county's current rate schedule before listing, since these thresholds can change from year to year.

Title insurance protects against legal issues that may arise after a sale, such as disputes over property boundaries, undisclosed liens or errors in public records. There are two types of title insurance policies, according to the National Association of Realtors.

• Lender's policy: Typically required by the buyer's mortgage lender to protect their investment through the life of the loan. Buyers usually cover this cost, according to the American Land Title Association. 
• Owner's policy: An optional policy for the buyer that lasts as long as they own the property. In certain places, including most counties in Florida, the practice is for the seller to pay for the buyer's title insurance at closing. 

As with transfer taxes, who pays for title insurance may be negotiable. Insurance and associated fees typically cost about a half-percent of the sale price, or about $2,000 for a $400,000 home, according to a 2023 report by the Urban Institute, a nonprofit think tank. The cost ranges from an average of $358 in Missouri to $3,496 in Pennsylvania, the group said in a 2025 analysis.

Whoever handles the closing, often a title or settlement company or a real estate attorney, charges a fee for the service. The closing agent will obtain the title insurance policy, prepare the deed to be filed at the local courthouse and handle other paperwork.

The seller may opt to help pay a portion of the fee, which ranges from $185 in Wyoming to $2,000 in Illinois, according to the Urban Institute's 2025 analysis.

In some states, a real estate attorney is required to be present at closing. Even in states where it is optional, sellers sometimes hire one for complex transactions, estate sales or properties with title issues.

To close, the seller needs to pay off the remaining balance on their mortgage. The lender will provide a payoff statement that includes any accrued interest through the expected closing date, plus potential fees.

For example, if a house sells for $450,000 and the seller still owes $100,000, the seller will receive $350,000 in equity minus closing costs after the sale is completed.

A few things to keep in mind:

• Prepayment penalties: While less common today, some older loans or certain loan types may include a penalty for paying off the mortgage early. Request your payoff statement at least two weeks before closing and check for any unexpected charges. 
• Daily interest: The payoff amount can change if you are close to your payment due date, since interest accrues daily. 
• Request the statement early: Waiting until the last minute to request a payoff figure can delay closing or result in a higher-than-expected balance. 

The seller must pay the portion of the annual property tax payment owed up to the closing date. Property taxes are prorated between buyer and seller based on when the sale closes.

For example, if your annual property taxes are $6,000 and you close on June 30 (exactly halfway through the year), you would owe roughly $3,000 for the six months you occupied the property.

The exact amount depends on when your municipality bills property taxes and whether you have been paying through an escrow account with your mortgage. If taxes are paid in arrears, you will likely owe more at closing. If paid in advance, you may receive a credit.

Any outstanding fees to a homeowners association, if one exists, must also be paid at closing. Many HOAs also charge a separate transfer fee, sometimes called a "resale package" or "estoppel fee," to process the ownership change. This can range from $100 to $500 or more.

Agent commissions are typically the largest portion of a seller's closing costs. The seller agrees to pay their own agent's commission and may offer to cover the buyer's agent fee as well. Each agent typically collects between 2% and 3% of the sale price.

Since the National Association of Realtors settlement took effect in August 2024, buyer agent commissions are no longer included in Multiple Listing Service, or MLS, listings. Sellers may still offer compensation to buyer's agents, but it's now negotiated separately.

On a $400,000 home, total commissions of 5% to 6% (split between both agents) would come to $20,000 to $24,000. Commission rates are always negotiable, and the services included vary by agent and brokerage.

Related content:

• How do real estate agents get paid? 

Yes. Concessions are costs that a seller agrees to cover on behalf of the buyer to help get the deal done. The National Association of Realtors reported that 24% of sellers offered concessions in 2024, which was down from 33% the year before, given buyer demand and a lack of homes for sale.

Concessions can be an effective tool when buyers have trouble coming up with cash upfront for a down payment and closing costs. Common types of concessions include:

• Covering closing costs: The seller pays for part or all of the buyer's closing costs, such as appraisal fees, title insurance or loan fees. 
• Mortgage origination fee: A lender charges this fee to issue a loan to the buyer. The seller may agree to pay it as part of the concession. 
• Home warranty: This covers unexpected repairs or replacement of major items, such as a heating and air conditioning system, that a buyer may face in the first year or so in the home. 
• Repair credits: Instead of making physical repairs after the inspection, the seller reduces the price or offers a credit to the buyer. 

Related content:

• How to handle offers on your house 

Buyers' home loans have varying limits on how much a seller can contribute. Here is a breakdown:

Sources: Fannie Mae Selling Guide (conventional); HUD Handbook 4000.1 (FHA); VA Pamphlet 26-7, Chapter 8 (VA); USDA Rural Development (USDA).

For VA loans, the seller may contribute up to 4% of the sale price, plus reasonable and customary loan costs, according to VA Pamphlet 26-7. Total contributions may exceed 4% because standard closing costs do not count toward the total.

These limits are designed to prevent seller contributions from artificially inflating property values. The seller's maximum contribution is the lesser of the percentage allowed by the loan type or the buyer's actual closing costs. Seller contributions may not be used toward the buyer's down payment.

Before listing, ask your agent for a seller net sheet. This document lists all expected costs and shows your projected take-home amount after subtracting commissions, closing fees, mortgage payoff and any concessions you plan to offer.

Here is how a hypothetical net sheet might look for a $450,000 sale:

This is a hypothetical example for illustration only. Actual costs vary.

Your actual numbers will depend on your location, mortgage balance and negotiated terms. A seller net sheet is one of the most useful financial documents in the selling process, and a good agent will walk you through it before you sign a listing agreement.

Related content:

• Buying a home in 10 steps 

In most cases, no. Seller closing costs are deducted from the sale proceeds at the closing table. The title company or closing agent calculates the total and subtracts it before issuing your check or wire transfer. However, if the costs exceed your equity in the home, you may need to bring cash to closing.

Some closing costs may reduce your taxable gain when you sell. For example, agent commissions and certain transfer taxes can typically be added to your cost basis, which lowers the amount of profit subject to capital gains tax. Most sellers who have lived in their home for at least two of the last five years qualify for a capital gains exclusion of up to $250,000 (single filers) or $500,000 (married couples filing jointly). Consult a tax professional for guidance specific to your situation.

Closing costs are the fees and taxes the seller is responsible for paying to complete the transaction. Concessions are additional costs that the seller voluntarily agrees to pay on behalf of the buyer, such as covering the buyer's appraisal fee or purchasing a home warranty. Concessions are negotiated as part of the purchase agreement and are subject to limits based on the buyer's loan type.

Some seller closing costs are fixed by law, such as transfer taxes and recording fees. Others are negotiable. Title insurance premiums can sometimes be reduced by shopping for providers or qualifying for a reissue rate if the seller purchased the property within the last few years. Agent commissions are always negotiable. Escrow and settlement fees can also vary by provider, so comparing quotes from multiple companies may save money.

• Transfer taxes 
• Title insurance (owner's policy, in some states) 
• Closing agent or attorney fees 
• Mortgage payoff 
• Prorated property taxes 
• Homeowners association fees and transfer charges 
• Agent commissions
• Seller concessions (if offered) 

This updated article was originally reported by David Holtzman.