While the buyer may be the one footing the bill for the purchase of a home in a real estate transaction, that doesn’t mean there aren’t any costs involved for homesellers. If you’re on the selling side of the deal, there are closing costs to consider: the fees associated with completing the sale and transfer of a home.

The exact amount of closing costs that sellers pay varies by state and with each transaction. In 2021, closing costs were about 1.03 percent of a home’s sale price, according to ClosingCorp.

What closing costs do sellers pay?

During the first half of 2021, the average closing costs for a single-family home were $6,837, according to ClosingCorp. These included both a lender’s and owner’s title policy, an appraisal, recording and settlement fees, a survey cost and transfer tax.

Closing costs are not the same as real estate commissions, which are also paid at the closing — usually by the seller. These have traditionally run about 6 percent of the home’s sale price. However, commissions have been trending downward. These days, they typically account for 4.9 to 4.94 percent of the home’s sale price. For a $400,000 listing, a 4.9 percent commission would equal $19,600. The buyer’s and seller’s agents typically split this fee down the middle.

Here’s a breakdown of some of the typical closing costs for sellers.

Types of closing fees Average cost
Data sources: The Mortgage Reports and My Mortgage Insider
Transfer taxes Varies by geographic location
Title Insurance $550
Escrow fees $350 to $1,000
Attorney fees Varies
Outstanding amount owed on mortgage Varies

What closing costs do buyers pay?

Although both homebuyers and sellers pay closing costs, the buyer is usually the party responsible for the bulk of the closing fees in a real estate sale. However, the exact amount each party pays is often part of the negotiations, and it’s common practice for the seller to offer a credit for some or all of the buyer’s closing costs. Here’s a breakdown of the typical closing costs for buyers.

Types of closing fees Average cost
Sources: The Mortgage Reports and My Mortgage Insider
Attorney fees Varies
Loan origination fee 1% of loan amount
Appraisal fees $450
Processing fee or underwriting fee $450
Credit report fees $35
Home inspection fees $300 to $500
Escrow and signing $450
Recording fees $110
Title search fee and title insurance $300 to $2,500

When are closing costs due?

Closing costs are due when you close on the sale of your home — the final step before you hand over the keys to the buyer. You will pay these fees when you and the buyer meet with the closing agent, title company and/or attorney to disburse the funds and sign the documents to complete the sale.

Note that you should take “due when you close” literally: Be sure to have your checks or money orders prepared in advance, and physically bring them with you to the closing. You’ll turn them over on the spot, not at a later date.

The law requires that both the buyer and seller receive closing documents that provide the details of the transaction at least three business days before closing. These documents will include an itemized list of closing fees.

How to reduce closing costs

The good news for sellers is that closing costs usually come out of the proceeds they receive from the sale. So you probably won’t have to come up with extra cash out-of-pocket if you’re on the listing side of things. There are a few ways, though, that you can try to lower fees:

  • Ask if your real estate agent is willing to take a lower commission, or work with an agent who offers discounted services. You may receive less marketing than you would otherwise when reducing the agent commission, though.
  • Consider selling your own home. Acting as your own agent, known as listing for sale by owner or FSBO, can help you avoid commission fees and hang on to more of  your home’s sale price.
  • See if the buyer will pay the closing costs, or, raise your home’s purchase price and agree to pay the buyer’s fees.
  • Negotiate better terms from your real estate attorney or title company.

Bottom Line

Keep in mind that your closing costs as the seller are in addition to the other costs of selling a house, including home repairs, staging costs and mortgage payments if you buy another house before your previous one sells. You may also be responsible for capital gains tax on the sale, which can impact your bottom line overall.