Seller closing costs: What to expect 

Real estate agent gives keys to couple.Image: Real estate agent gives keys to couple.

In a Nutshell

In a home sale, sellers can generally expect to pay real estate agent commissions, escrow fees, title insurance costs and more. In all, closing costs for the seller are typically 6% to 10% of the home’s sale price. Knowing what these fees are in advance — and which are negotiable — can help you avoid any unwelcome surprises.
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While you may be looking forward to reaping a tidy profit from a home sale, make sure you factor in seller closing costs so you have a better idea about what your sale proceeds may be.

Most home sellers end up paying between 6% and 10% of the sale price in various closing costs, including real estate agent commissions, attorney fees, transfer taxes and more.

Given that the average sale price for a home in the U.S. was $513,400 in the third quarter of 2023, a seller with a home that price could expect to pay between $30,804 and $51,340 in closing costs.

If you’re getting ready to sell your home, it’s a good idea to know what fees you may have to pay and how much they’ll potentially cost. That knowledge can help you be more prepared — and maybe even find ways to bring the cost down.

What are some common closing costs for home sellers?

Both buyers and sellers are on the hook for closing costs, but they’re often higher for the sellers. As a seller, you can expect to pay between 6% and 10% of your home’s sales price. The buyer, on the other hand, usually pays between 2% and 5%.

Here are some of the typical closing costs for sellers.

Real estate agent commissions

In a typical home sale, the buyer’s real estate agent and the seller’s agent will split a 5% to 6% sales commission, with each agent getting half. The agent you hired to sell your home did their job, and the buyer’s agent also did their job by bringing you a customer that’s ready to buy your home.

Learn more about how real estate agents get paid.

Transfer tax

Depending on the rules set by your state or local government, you’ll typically also need to pay real estate transfer taxes. In Washington state, for example, these taxes range from 0.25% to 2% of your home’s purchase price, depending on where you live.

Seller concessions

As you negotiate your home’s purchase price with your buyer, it’s not uncommon for them to ask you to help pay some of their closing costs or cover needed repairs — known as seller concessions or credits. If a problem is discovered during the home inspection, for example, your buyer may ask for a seller credit to pay for the cost of repairs.

Title insurance

As the seller, you’re generally expected to pay for title insurance. This protects buyers and their lenders in case any issues with your home’s title pop up. For example, if someone filed a lien against your home, that could complicate your sale.

Title insurance usually costs around $1,000, but the cost can vary depending on where you live.

Escrow fees

You’ll work with an escrow company who will oversee the transaction and make sure everyone’s holding up their end of the bargain when it comes to transferring the money and ownership of your home.

Escrow companies usually charge about 1% to 2% of your home’s sale price for this service. Whether you or your buyer pays it in full or splits the cost depends on how things are done in your area.

How to reduce closing costs

You’ve already got a lot on your plate if you’re selling a home, but it’s important to know that you may be able to save money on these fees. In some cases, it can be well worth your time.

Negotiate your real estate agent commission

The commission rates sellers pay can be negotiated. If you were to negotiate a 5% commission rate with your real estate agent instead of a 6% rate, you could save more than $5,000 in the sale of an average-priced home ($513,400 in the third quarter of 2023).

Sell your own home

If you have time and you’re savvy with legal contracts, putting together teams, negotiating terms and marketing, you might be a good candidate for a DIY home sale — and skipping the seller’s agent commission entirely. But you may still have to pay the buyer’s agent commission, even if you don’t use your own agent.

For sale by owner, or FSBO, sales made up about 10% of all home purchases in 2022, according to the National Association of REALTORS® — though half of those were to people the sellers already knew. These homes typically sold for about $120,000 less compared to homes sold with the help of a real estate agent, the trade group said.

What are other common expenses for home sellers?

Closing costs represent a big chunk of your financial outlay when selling your home, but they’re not the only expense. Make sure you consider these other factors, which can be pricey.

Presale inspection

You’re not required to get a presale home inspection, and opting out can save you $250 to $500, on average. Generally, buyers will pay for their own independent home inspection.

A home inspection may be helpful because it can flag any repairs you may need to do before you put the home on the market. It also decreases the chance of any surprises later when the buyer gets their own inspection done. That can help you speed up the process of selling your home — and you may even get a better price for it too.

Home cleaning and repairs

You may want to catch up on any overdue maintenance and make any needed repairs to improve the odds of a quick sale. Any issues with your home that you don’t fix must be listed in a seller’s disclosure, which is a legal document that home sellers must provide that reveals known problems.

A full top-to-bottom house cleaning is also a good idea. A dirty toilet or stained carpeting can deter potential buyers from putting in an offer. Though you can tackle this work yourself, hiring professionals to do the job can help you bring your home to market sooner.

Home staging

The final cherry on top of getting your home ready for sale is home staging. The median cost of using a staging service is about $1,500, while homeowners who choose to have their agent do the staging will pay around $300, according to the 2021 survey from the National Association of REALTORS®.

What’s next?

You’ll need to do some research to see what closing costs may cost in your area and how they’re generally divvied out between the buyer and the seller.

Once you have this information, you can put together a home-selling budget so you have a good idea about how much it’ll cost to sell your home. Once you have a realistic estimate of your home-sale proceeds, you can better plan how much money you’ll have for the purchase of your next home.

Estimate your closing costs

Use our closing costs calculator to get a better idea of how much your closing costs could be when buying a home.

About the author: Lindsay VanSomeren is a freelance writer living in Kirkland, Washington. She has been a professional dogsled racer, a wildlife researcher, and a participant in the National Spelling Bee. She writes for websites such a… Read more.