Seller Closing Cost Breakdown: What Are Typical Closing Costs Paid By Seller?

Seller Closing Cost Breakdown: What Are Typical Closing Costs Paid By Seller?

Reviewed by: Brandon Brown

When a house is sold, the buyer and seller are responsible for legal fees and taxes called closing costs. So on average, how much does it cost to sell a house from the seller’s perspective?

If you’re the seller, you’ll want to budget 8% to 10% of the home’s sale price to ensure you can cover the total closing cost. Here’s a quick look at what generally accounts for a sellers expenses at closing:

  • Real estate commission
  • Transfer tax
  • Owner’s title insurance (optional)
  • Escrow fee (if applicable)
  • Attorney’s fee (if applicable)

The amount you can expect to spend varies. Read on to learn more about the closing process for sellers.

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Real Estate Agent Commission

When answering, what are typical closing costs paid by the seller?, it helps to start with the biggest expense—the real estate agent commission. Real estate agent commissions will take up the majority of your closing costs budget as the home seller.

When a home is sold, there are typically two real estate agents who make it happen: a buyer’s agent and a seller’s agent, also known as a listing agent. The buyer’s agent helps the buyer find the home of their dreams, while the seller’s agent lists the home and shows it to potential buyers. Typically, the combined commissions of the agents is 6% of the house’s sale price. The seller pays both commissions:

  • Buyer’s agent – It’s common practice for the seller to pay for the commission fee of the buyer’s agent as a sort of fee for finding a buyer. The commission fee for the buyer’s agent is typically 3% of the house’s sale price.
  • Seller’s agent – The seller’s agent typically gets a commission of 3% of the sale price as well. In theory, the seller agent is splitting the 6% commission with the buyer agent because the arrangement is a co-brokered one.

While these percentages seem small, they can make a big impact on a seller’s budget. Let’s say a seller is selling their home for $500,000. A typical commission would be 6% of that price, so a seller would have to pay the new owner $30,000.

Transfer Tax

When a home changes ownership, the state charges a tax for the transfer fee. Typically, the seller covers this tax. In some states, it’s even the law. The amount taxed is usually a percentage of the home sale. What you can expect will vary from state to state. In NYC, for instance, the home seller pays two transfer taxes: one to the state and one to the city.

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Owner’s Title Insurance

While not required by law, buyers will often request that the seller take out an owner’s title insurance. Owner’s title insurance protects the buyer from any problems they happen to find in the future that are shown to have existed before the time of closing.1 The average cost of this insurance is typically a small percentage based on the sale price, usually totaling around $1,000.

Escrow Closing Fees

Once the buyer and seller settle on a purchase price, the buyer will put aside 1% to 2% of the house’s total sale price into an escrow account. Here’s why and how it works:

  • Third-party account – An escrow is a neutral, third-party account that both seller and buyer can trust while following through with the home sale.
  • Good faith deposit – A buyer deposits money into the escrow account to show they’re serious and committed to following through with the sale.
  • Release of funds – Money in the escrow account is released and applied toward the buyer’s down payment once the house has been officially closed on. This can sometimes take weeks after the closing.
  • Escrow fee – When funds are dispensed from escrow, an additional fee is paid for the service. Since the function of escrow is in the interest of all parties involved, the buyer and seller typically split the cost of the escrow fee.

Attorney Fees

To sell a home, there are laws that have to be followed on the state and federal levels. When it comes to dealing with matters of the law, it’s often best to have a lawyer. Here’s a quick rundown of what a real estate attorney does, and why having one warrants a fee:

  • Keeps the law – A real estate attorney helps sellers to ensure they are within the limits of the law before completing a real estate transaction. In several states, it is the law to have an attorney present when closing on a house.2 Even if your state doesn’t require an attorney’s presence, it’s typically just a good idea to follow this practice.
  • Records agreements – Along with serving as your go-to encyclopedia for dos and don’ts, the real estate attorney also monitors negotiations and keeps track of what both parties are legally committed to at the time of closing. You said you’d fix the squeaky board in the porch step? The attorney has a record of it. They said they were willing to pay for their real estate agent fees? The attorney, though greatly surprised, has a record of that, too.

Save on Closing Costs with FlipSplit

As you calculate your future selling costs, it helps to factor in the closing costs and find ways to help reduce your expenses. The biggest closing cost fee is the real estate agent commission—but it’s not a required one. FlipSplit removes the need for a seller’s agent, thus making it one of the easiest, most effective ways to save on seller closing costs. Check out our site today to get an offer on your house exactly when you want it.

Wondering what are common home selling mistakes? Or maybe what selling a house to a cash buyer is like? FlipSplit has you covered.


  1. Consumer Financial Protection Bureau. Do I need an attorney or anyone else to represent me when closing on a mortgage?
  2. Consumer Financial Bureau Protection. What is owner’s title insurance?

Reviewed by: Brandon Brown

As a long-time Asset Manager, Investor, Real Estate Agent, and Broker/Owner of BayBrook Realty in Orange County, Brandon Brown is one of FlipSplit’s lead Real Estate experts. Having worked on over 2,000+ real estate transactions, Brandon brings a depth of knowledge that ensures clients are appropriately treated with honesty and integrity. His insights and advice have been published in numerous blogs beyond FlipSplit, and he keeps a close eye on market trends and statistics, which are updated weekly on his social media pages. Outside work, you can find him participating and serving at church, cycling, mountain biking, surfing around Orange County and beyond, and enjoying time with his wife and two daughters.

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