Both buyers and sellers will pay closing costs, but the costs vary and include a long list of fees, prepayments, and services that make the transaction happen.
As a buyer, you can expect to pay about 3 percent of the purchase price in closing costs, most of which goes to lender-related fees. But also keep in mind that you can request the seller to cover some of your closing costs.
Closing costs for sellers can reach 8-10 percent of the sale price of the home. It’s higher than the buyer’s closing costs because the seller typically pays both listing and buyer’s agent’s commission, around 6 percent of the sale. Fees and taxes for the seller are 2-4 percent of the sale. However, seller closing costs are deducted from the profits made on the sale of the home on closing, so rarely will you need to bring cash to closing.
According to Zillow research, 61 percent of sellers are first-time sellers, and the closing process can be confusing, whether you’re new to the process or you’ve done it before. Closing costs can vary based on where you live, due to variations in local tax laws, lender costs, and title and settlement company fees. But while the amounts may vary, the information you need to know doesn’t.
Here is a quick guide to break down who pays what at closing....