You and your buyer will customarily share the closing costs. On a median sale price of $434,720, your closing costs can be around $8,694 to $21,736. Additionally, closing cost rates vary by state, from 2.7% in Missouri to 3.2% in Florida.
To plan your specific expenses effectively, use the free seller closing cost calculator below. This tool will help you calculate location-based closing fees and maximize your FSBO sale profits.
What are Closing Costs?
Closing costs encompass all expenses you pay when transferring property ownership from seller to buyer. These include title insurance, property taxes, escrow fees, transfer taxes, HOA fees, and administrative charges.
What Are Typical Closing Cost Percentages?
Closing fees as a FSBO seller range from 2% to 5% of your home’s sale price. The following will impact your closing cost percentage:
- State and Local Tax Rates: Higher tax jurisdictions increase your transfer taxes and recording fees.
- Residual Mortgage: Larger loan balances lead to higher settlement charges at closing.
- Title Insurance: Premium rates increase proportionally with your property’s purchase price.
- Home Warranty: Broader coverage plans result in higher closing cost percentages.
What Fees Does the Seller Pay When Selling a House?
For a $400,000 home, you’ll pay between $8,500 to $21,000 in total closing costs. The exact number depends on your location and specific transaction details. Here’s what drives your closing fees when selling a house:
- Transfer Taxes: Rates vary from 0% to 3% by state – Colorado charges just $80, while New York demands 1% of the sale price.
- Attorney Requirements: 21 states mandate legal representation, adding $500 to $2,000 in fees.
- Title Insurance: Costs range from 0.5% to 1% of your mortgage, with rates set by each state.
- Settlement Fees: Expect 1-2% of the sale price, varying between attorney and escrow states.
- Tax-Free States: Alaska, Oregon, Texas, and 9 other states charge no transfer taxes, lowering your closing costs.
A Complete Breakdown of Seller’s Closing Costs
You must understand closing costs when selling a house to avoid unplanned expenses. You’ll find the breakdown of the closing fees for a $400,000 property sale below.
Mortgage Associated Costs for Seller
Your largest closing cost may stem from your existing mortgage balance payoff. Early recognition of these costs helps you calculate your exact in-hand amount from the sale. Common mortgage payoff costs at closing are:
- A full mortgage balance payoff.
- Accrued interest through your closing date.
- Prepayment penalties, which can be up to 2% of your remaining balance.
- Reconveyance deed fees for mortgage payoff recording.
Title Insurance and Search Fees
Title insurance protects your sale from future ownership claims and legal disputes. You should resolve title issues early to avoid costly delays at closing. These costs include:
| Title Search Cost | $150-$300 |
| Owner’s Title Insurance | 0.5-1% of your sale price |
| Title Update Fee | $150 |
| Wire Transfers | $50 |
| Extended Title Chain | $250 |
| Courier Services | $75 |
Government Fees and Property Taxes
Local and state governments charge mandatory fees for property ownership transfers. Plan for these fixed costs to set an optimal listing price. Your expenses will include:
- Transfer taxes that range from 0.1-3% of your sale price.
- Recording fees that apply to deed transfers and documentation.
- Prorated property taxes until closing.
- Applicable HOA-related costs like:
- Monthly Dues: $100-$500
- Transfer Fee: $100-$500
- Estoppel Fee: $200-$500
Legal and Settlement Fees
Professional services ensure your FSBO sale closes smoothly and stays legally compliant. Smart negotiation of these fees can save you hundreds of dollars. These service fees typically include:
- Attorney fees at $150-$400 per hour in states requiring legal representation.
- Settlement charges (escrow fee) of 1% to 2% of the sale price, split with the buyer.
- Fees to prepare and process all required documents
Inspection and Home Warranty Fees
Smart inspection investments can prevent buyer disputes and speed up your sale. Pre-listing inspections give you control over repair timing and costs. For a smooth closing, consider these key inspection expenses:
- A standard home inspection costs $300-$500.
- Home warranty plans start at $50 monthly plus service fees.
- Optional pre-listing inspections require additional investment.
Who Pays Closing Costs When Selling a House by Owner?
Who typically pays closing costs varies based on your local market and negotiations. In FSBO sales, you’ll handle these cost divisions directly with your buyer. Here’s what you need to know about standard payment responsibilities.
Who Covers Closing Costs: Industry Standards
Who pays closing costs when selling a house by owner depends on your local market standards. You can negotiate better deals with buyers when you know the local standards.
| Costs Covered by Sellers | Costs Covered by Buyers |
| Title Insurance for the Buyer | Mortgage Origination Fees |
| Transfer Taxes and Recording Fees | Home Inspection |
| Settlement Agent Fees | Appraisal Cost |
| Property Taxes up to the Closing Date | Credit Report Charges |
| Outstanding HOA Dues and Assessments | Lender’s Title Insurance |
| Home Staging Costs |
Why Would a Seller Pay Closing Costs?
In today’s real estate market, offering to pay home sale closing costs represents a valuable opportunity to boost your bottom line. Here’s how paying closing costs drives stronger returns:
- Accelerates Your Sale: Properties with seller concessions attract more buyers and sell faster.
- Secures Premium Offers: Absorbing closing costs often allows you to list at a higher price point.
- Strengthens Negotiations: Closing cost credits gives you a powerful bargaining advantage.
For example, offering $5,000 toward a buyer’s closing costs might let you price your home $7,000 higher.
Typical Buyer Obligations
You can structure more profitable deals when you know the buyer’s financial obligations. Standard buyer responsibilities include:
- Down payment on the home
- Mortgage insurance premiums
- Home inspection costs
- Bank processing fees
- Moving expenses
How to Pay Closing Costs?
Most sellers pay closing costs from their sale proceeds. Your settlement agent will deduct these costs directly from your earnings at closing. Keep some cash reserves handy for any pre-closing expenses that might arise.
Smart sellers pay some closing costs early to reduce their final settlement charges. For example, you can pay property taxes or HOA dues ahead of time. This strategy often saves you from complex prorations at closing.
Can You Finance Closing Costs?
Unlike buyers, sellers cannot roll closing costs into a new loan. Your closing costs come directly from your home sale value. However, to handle these expenses you can:
- Use your home equity before selling.
- Pay some costs early to spread out the expense.
How to Avoid Closing Costs When Selling a House?
Unfortunately, you cannot eliminate closing costs. However, some smart strategies can help reduce your closing cost burden.
- Opt for a Flat Fee MLS platform to eliminate listing agent commission.
- Shop around for title insurance rates.
- Time your sale to minimize tax prorations.
- Negotiate fees with service providers.
- Consider selling in a seller’s market when buyers are more likely to cover costs.
- Request multiple quotes for required services.
Closing Cost Reduction Strategies
FSBO sellers can reduce their costs significantly through early planning and strategies. Neglecting cost-cutting strategies in the sale process causes many sellers to miss key savings opportunities.
Comparing Title Services: Request quotes from at least three different title companies to reduce these expenses. This simple comparison can save you $500-$800. You can find a title partner near you with the easy search tool below.
Negotiate Smarter, Not Harder: Many sellers don’t realize certain fees are negotiable. Here’s where to focus your negotiations:
- Settlement fees allow room for significant reductions
- Title insurance rates offer potential discounts
- Keep an eye out for Duplicate charges
Skip Unnecessary Coverage: Save money by focusing on essential coverage only. For example, basic home warranty plans cost 36% less than comprehensive packages. These affordable plans work well, especially for newer homes.
Who Pays What in FSBO Closing Costs?
Who pays closing costs when selling a house by owner varies by local market customs. You must negotiate with the buyer to keep the closing cost between 2-5%.
FSBO sellers can protect their profits with smart strategies and modern technology. Take control of your closing costs and eliminate listing agent fees with the flat fee MLS listing.
Frequently Asked Questions
Are realtor fees included in closing costs?
No, FSBO sales don't include realtor fees, but you'll still pay the typical closing costs for seller. You can use a seller closing cost calculator to get a proper estimate of your closing cost.
How much does a seller pay in closing costs?
The typical closing cost for sellers ranges from 2%-5% of home sale value. A complete breakdown of closing costs for seller shows what do sellers pay at closing in detail.
Can you pay closing costs with a credit card?
No, most settlement agents and lenders don't accept credit cards for closing costs. But you can explore how to pay closing costs through other options like using your home equity.
Do sellers pay closing costs in FSBO sales?
Yes, sellers typically pay closing costs in FSBO sales, but cost reduction strategies and DigiTransact can minimize and help track your expenses.
