What closing costs does a home seller pay?

The last step in selling a house is closing. While sellers often sign the paperwork ahead of time, they are responsible for paying some of the closing costs, or "settlement fees," before the deal can be finalized. In some cases, the sellers may offer concessions in which they pay some of the costs buyers typically handle.

Closing costs usually range from 2% to 5% of the value of the buyer's mortgage and are paid in addition to the down payment, according to mortgage giant Fannie Mae.

Here are some typical charges:

These are one-time taxes that the state or local government, or both, levy, usually based on the sale amount. The tax rate varies widely: It's a penny for every $100 of value in most parts of Colorado, but 70 cents per $100 in Florida. Fourteen states do not have a statewide transfer tax, according to the Tax Foundation: 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 have an additional one. In some states, only a statewide tax is collected, but it may differ in a particular county. For example, in Miami-Dade County, Florida, it’s 60 cents per $100. Most states and local governments set a uniform rate for all properties, but a few have a graduated one based on the sale price, according to the George Washington Institute of Public Policy at George Washington University.

Typically, the seller pays these fees, but they can be negotiable.

In a few states, high-end home sellers also pay a "mansion tax" or "millionaires tax" beyond the regular transfer tax. The Los Angeles tax is 4% for sales above $5.1 million, according to the city's website. (After June 30, 2025, the new thresholds will be $5.3 million and $10.6 million. Transactions above $5.3 million but under $10.6 million will be assessed a 4% tax, and transactions of $10.6 million and up will be assessed a 5.5% tax). The tax in New York City has applied since 2019 to sales over $3 million, according to the New York State Department of Taxation and Finance.

It’s wise for anyone buying property to obtain title insurance to guard against any legal issues that may arise, such as disputes over property boundaries or liens. There are two types of title insurance policies, according to the NAR. One is typically required by lenders to protect their investment through the life of the loan. The other is an optional policy for owners that lasts as long as they have the property. Buyers usually cover the lender policy, according to the American Land Title Association. In certain places, including most counties in Florida, the practice is for the seller to pay for the owner's title insurance at closing. As with transfer taxes, who pays these one-time fees may be negotiable. Insurance and associated fees typically cost 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 a 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.

To close, the seller needs to pay off the mortgage. 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. The seller also must pay the portion of the annual property tax payment owed up to the closing date and any outstanding fees to the homeowner association, if one exists.

The sellers agree to pay their 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. This is likely the largest portion of a seller’s closing costs.

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 important to entice buyers when they have trouble coming up with cash upfront for a down payment and closing costs. Buyers’ home loans have varying limits on how much a seller can offer them in concessions: They tend not to exceed 6% of the sale price, according to the NAR. That's the upper limit for Federal Housing Administration and U.S. Department of Agriculture home loans, while the U.S. Department of Veterans Affairs caps concessions at 4%. Concessions greater than 6% may be possible when the buyer has a bigger down payment.

Among the items the NAR says may be included in seller concessions is the mortgage origination fee, which a lender charges to issue a loan to a buyer. Another is a home warranty, which covers unexpected repairs or replacement of major items like a heating and air conditioning system that a buyer may face in the initial year or so in the home.