Important points
What the Seller Pays: The seller typically pays real estate agent commissions (typically 3% to 6% of the sales price), title insurance (approximately 0.5% to 1% of the home price), and various closing costs that typically range from 2% to 5%. These numbers represent national averages and actual costs may vary significantly depending on location and property value. Costs paid by the buyer: Buyers typically pay a home appraisal (average $300 to $700), loan-related fees (approximately 2% to 5% of the total loan amount), and a home inspection (usually $350 to $750). Regional differences and negotiation: Costs vary by region and are often negotiable between buyers and sellers.
Who pays for what when selling a house?
Buying and selling a home requires more than just agreeing on a price. From loan fees and title insurance to inspections and fees, both parties share financial responsibility by the time they get to the closing table. The exact breakdown depends on local customs, lender rules, and how both parties negotiate.
Some costs are negotiable, but many follow long-standing standards. Understanding who typically pays for what can help you estimate your true costs and avoid last-minute surprises.
Fact: According to the National Association of Realtors (NAR), the average seller spends about 8 to 10 percent of a home’s sale price on fees and related costs, while buyers typically pay 2 to 5 percent themselves in closing costs.
Who pays what in a real estate transaction?
Here’s a quick look at who typically pays for each major cost and which expenses are negotiable. Some rates are standard, while others are subject to change depending on local customs and strength of negotiation.
Types of Fees Paid by Seller Paid by Buyer Negotiable Real estate commission ✅ Appraisal fee ✅ Home inspection ✅ Escrow fee ✅ Owner’s title insurance ✅ Lender’s title insurance ✅ Recording and transfer taxes ✅ Home deposit ✅ Land survey ✅ Prorated property taxes ✅ ✅ Repairs or concessions ✅
Bottom line: Understanding these costs early can help both parties budget with confidence and avoid last-minute stress. Having clear expectations will make the closing ceremony much smoother for everyone.
What fees does the seller pay when selling a home?
Now that you know how costs are typically divided, let’s take a closer look at how much sellers typically cover.
In most cases, the seller takes on the greater financial burden of converting the property into cash. Typical seller costs include:
Realtor’s commission: Typically 3-6% of the sales price, split 50-50 between the listing agent and the buyer. Buyer’s Title Insurance: Protects new homeowners from title disputes. Transfer tax: Usually paid by the seller and calculated as a percentage of the sales price. Escrow fees: Shared or paid entirely by the seller, depending on local customs. Repairs and concessions: In many cases, the seller will pay for the negotiated repairs after the inspection. Unpaid bills and HOA dues: Prorated to closing date.
Pro tip: Ask your Redfin agent for a net sheet early in the process to estimate your take-home pay.
Who pays the escrow fees?
An escrow company acts as a neutral third party that holds funds and documents until the transaction is completed. Fees vary by state. In California, the buyer and seller typically split the escrow fee, but in Washington, the buyer may pay the entire amount.
Typical escrow fees range from 1 to 2 percent of the home price. If the market is depressed, sellers may incur this cost to make their listings more attractive.
Who pays for the home inspection?
Buyers usually pay for the home inspection as part of due diligence. According to Rocket Mortgage, the average inspection cost is between $300 and $500.
Some sellers order pre-listing inspections to identify potential problems early. This is a proactive measure to prevent any surprises during negotiations.
Who pays the appraisal fee?
Before closing the loan, the lender will require an appraisal to determine the market value of the home. Buyers pay an appraisal fee, typically between $400 and $700.
However, in competitive markets, the seller may agree to cover this cost as part of the negotiated offer.
Who pays for title insurance?
Two policies exist:
Title Insurance: Paid by the seller to protect the buyer. Lender’s Title Insurance: Paid by the buyer to protect the lender’s interests.
Local customs determine who pays what premiums. In some regions, sellers cover both. In some cases, the costs may be shared.
Who pays for the land survey?
The buyer usually pays for a land survey to confirm boundaries. Costs range from $300 to $1,000, depending on lot size and location. The seller may request a survey in advance to address boundary issues early.
Who pays real estate transfer tax?
Transfer taxes (also known as transfer taxes) are typically paid by the seller. These can vary widely from 0.1% to 2% of the sales price, depending on local laws.
Check your state’s requirements through Redfin’s Home Selling Cost Guide.
Who pays the home warranty fee?
Either party can pay for a home warranty, which typically costs between $400 and $700 per year. Sellers often include this feature to attract buyers and reduce post-sale disputes regarding appliances and systems.
Why should the seller pay closing costs?
The seller may pay a portion of the buyer’s closing costs (called a seller concession) to make the deal more attractive. This strategy works well in a buyer’s market or when the property has been listed for a while.
Covering costs such as loan origination fees and prepaid taxes can help close the deal faster, but it reduces the seller’s net profit.
Detailed breakdown: Who pays what when you sell your home?
Closing Costs Are typical payers negotiable?Details Loan Origination Fee (0-1% of loan amount) Buyer ❌ Charged by the lender for processing the loan. Realtor’s Commission (5-6%) Seller ✅ Standard on most US sales. Buyers rarely pay. Processing Fee ($300–$900) Buyer ❌ Paid to lender for document preparation. Underwriting Fee ($300–$750) Buyer ❌ Covers the cost of evaluating loan risk. Application Fee ($200–$500+) Buyer ❌ Charged by the lender to process your mortgage application. Credit Report Fee ($35) Buyer ❌ Covers the cost of obtaining your credit report. Home Appraisal Fee ($500–$1,000+) Buyer ✅ May be paid by seller to improve offer. Home Inspection Fee ($300–$500) Buyer ✅ Usually paid by the buyer. Seller may offer a pre-inspection. Title Search and Title Report ($300–$2,500+) Split ✅ Check for clear titles. Cost splits vary by region. Lender’s Title Insurance ($300–$1,500+) Buyer ❌ Protects the lender’s interests. Title Insurance (Optional) Protects Seller ✅ Buyer. Often paid by the seller. Escrow Fees ($350–$1,000+) Split ✅ Shared between buyer and seller in most states. Recording Fees ($20–$250) Buyer ❌ Covers local recording of deeds and mortgages. Prepaid Taxes and Insurance ($1,000 – $4,500+) Buyer ❌ Prepayment required into lender’s escrow account. Prepaid Interest (Varies) Buyer ❌ Covers interest from closing to first mortgage payment. Mortgage or discount points (0-1% of loan) Buyer ✅ Optional: Lower your loan interest rate. Private Mortgage Insurance (PMI) Purchaser ❌ Required for less than 20% reduction on conventional loan. Real estate attorney fees ($400+) Buyer ✅ Required in some states. Can be shared by agreement. HOA Fees (varies) Buyer ✅ Often paid upfront. Conditions vary depending on HOA rules. HOA Transfer Fee (Variable) Seller ✅ Paid to update the association’s ownership records. Survey fee ($400+) Buyer ✅ Confirm property boundaries. May be required by your lender. Flood Certificate ($20) Buyer ❌ Determine whether you need flood insurance. Notary Fees ($100) Buyer ❌ Pays for notarization of closing documents. Closing Protection Letter (CPL) Fee ($50) Buyer ❌ Provides legal protection in escrow transactions. Document Preparation Fee ($50) Buyer ❌ Includes preparation of final loan documents.
FAQ: Who pays what when I sell my home?
Can the buyer negotiate for the seller to cover closing costs?
yes. In a buyer’s market, sellers often make concessions to help with upfront costs. Can a seller refuse to pay certain fees?
yes. However, most standard costs, such as commissions and title insurance, are difficult to avoid. Are seller costs tax deductible?
Some expenses, such as agent fees and home improvements made before the sale, can reduce your taxable gain. Please consult a qualified tax professional for more information.
Take the next step towards selling your home
Understanding who pays for what when you sell your home can help you plan and avoid surprises on the final day. The seller typically pays commissions, title fees, and transfer taxes, while the buyer handles inspections, appraisals, and loan costs. Ultimately, local customs and negotiations will determine the specific breakdown.
Ready to take the next step? Contact your local Redfin agent to get a personalized quote on your selling costs and find out how to maximize your net revenue.
