Closing Costs Calculator: What Buyers and Sellers Actually Pay

· February 25, 2026 · ·Real Estate

What Are Closing Costs?

Closing costs are the fees, taxes, and charges you pay when a real estate transaction is finalized – beyond the home price and down payment. For buyers, closing costs typically range from 2% to 5% of the purchase price. For sellers, total transaction costs (including agent commissions) typically run 6% to 10%. On a $400,000 home, that means the buyer pays $8,000-$20,000 and the seller pays $24,000-$40,000 at closing.

Understanding exactly what these costs include – and who pays for what – helps you budget accurately and avoid surprises at the closing table.

Buyer Closing Costs: A Complete Breakdown

Loan Origination Fee

Typical cost: 0.5%-1.0% of the loan amount.

This is the lender fee for processing your mortgage application. On a $320,000 loan, expect $1,600-$3,200. Some lenders advertise zero origination fee loans, but they typically compensate by charging a higher interest rate. Always compare the APR (which includes this fee) rather than the advertised rate alone.

Discount Points (Optional)

Typical cost: 0%-2% of the loan amount (buyer choice).

Each discount point costs 1% of the loan amount and reduces your interest rate by approximately 0.25%. One point on a $320,000 loan costs $3,200 and might drop your rate from 6.5% to 6.25%, saving roughly $64/month. The break-even point is about 50 months (just over 4 years). Points make sense if you plan to stay in the home long-term.

Appraisal Fee

Typical cost: $300-$600.

Required by the lender to verify the home value supports the loan amount. FHA and VA appraisals may cost slightly more due to additional property condition requirements. The appraiser visits the property, measures it, photographs it, and compares it to recent comparable sales.

Home Inspection

Typical cost: $300-$500.

While technically paid before closing (usually within 7-10 days of the offer), this is part of your transaction costs. Specialized inspections (radon, sewer scope, termites) add $100-$300 each.

Title Search and Title Insurance

Typical cost: $500-$2,000 combined.

The title search examines public records to ensure the seller has clear ownership and there are no liens, encumbrances, or claims against the property. Title insurance protects you (owner policy) and your lender (lender policy) against undiscovered title defects. The lender requires lender title insurance; owner title insurance is optional but strongly recommended.

  • Lender title insurance: $400-$1,000 (required)
  • Owner title insurance: $500-$1,500 (optional but recommended)
  • Title search fee: $200-$400

Recording Fees

Typical cost: $50-$250.

Charged by the county to record the deed and mortgage in public records. Fees vary by county and are based on the number of pages in the documents.

Survey

Typical cost: $300-$800.

A property survey confirms the lot boundaries, identifies easements, and verifies that structures are within property lines. Not required in all states or transactions, but recommended if there are fence disputes or if the lender requires it.

Attorney Fees

Typical cost: $500-$2,000.

In some states (New York, Massachusetts, Connecticut, Illinois, and others), attorney involvement is legally required at closing. Even in states where it is not required, hiring a real estate attorney to review documents is money well spent, especially for first-time buyers or complex transactions.

Prepaid Items

These are not fees – they are advance payments that would be due regardless – but they are paid at closing and can substantially increase your cash needed:

  • Prepaid property taxes: Typically 2-6 months of property taxes held in escrow. On a $400,000 home with a 1.2% tax rate, that is $800-$2,400.
  • Prepaid homeowners insurance: First year premium plus 2-3 months escrow reserve. Budget $1,500-$3,000.
  • Prepaid mortgage interest: Per diem interest from the closing date to the end of the month. Closing early in the month maximizes this cost; closing at month-end minimizes it.

FHA/VA Specific Fees

  • FHA Upfront MIP: 1.75% of the loan amount (usually rolled into the loan).
  • VA Funding Fee: 1.25%-3.3% depending on down payment and usage (can be rolled into the loan; exempt for disabled veterans).

Total Buyer Closing Costs Example

For a $400,000 home with 10% down ($40,000), $360,000 conventional loan:

  • Origination fee (0.75%): $2,700
  • Appraisal: $450
  • Home inspection: $450
  • Title search and insurance: $1,800
  • Recording fees: $150
  • Attorney fees: $800
  • Prepaid taxes (3 months): $1,200
  • Prepaid insurance (14 months): $2,800
  • Prepaid interest (15 days): $900
  • Total: approximately $11,250 (2.8% of purchase price)

Seller Closing Costs: A Complete Breakdown

Real Estate Agent Commissions

Typical cost: 5%-6% of the sale price (total, split between agents).

This is by far the largest seller expense. On a $400,000 sale at 5.5%, that is $22,000. Since the 2024 NAR settlement, commission structures have become more negotiable and transparent. Some sellers negotiate lower listing commissions (1-2% with discount brokers) or sell FSBO to eliminate the listing side entirely.

The typical split is 2.5-3% to the listing agent and 2.5-3% to the buyer agent, though this varies by market and is now explicitly negotiated rather than assumed.

Transfer Taxes

Typical cost: 0.1%-2.0% of the sale price, depending on state and locality.

Also called documentary stamps, conveyance taxes, or excise taxes. These vary enormously:

  • No transfer tax: Alaska, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah, Wyoming
  • Low (under 0.5%): Arizona, Colorado, Florida, Georgia, Iowa, Kentucky, Michigan, Nebraska, Ohio, Oklahoma, South Dakota, Virginia, West Virginia
  • Moderate (0.5%-1%): California, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, North Carolina, Tennessee, Wisconsin
  • High (over 1%): Connecticut (0.75%-2.25%), Delaware (4% on properties over $100K), New York (varies, NYC is highest), Washington (1.1%-3.0%), Washington DC (1.1%-2.9%)

Some localities add additional local transfer taxes on top of the state tax. Always check your specific state and county rates.

Title Fees (Seller Portion)

Typical cost: $500-$1,000.

In many states, the seller pays for the owner title insurance policy as a customary part of the transaction. The seller also typically covers the cost of the title search. These customs vary by state and are negotiable.

Escrow and Settlement Fees

Typical cost: $500-$2,000.

The escrow or settlement company charges for managing the closing process, holding funds, and facilitating the document signing. Often split between buyer and seller, though this is negotiable.

Prorated Property Taxes

Typical cost: Varies.

The seller owes property taxes through the closing date. If taxes were prepaid for the year, the buyer reimburses the seller for the unused portion. If taxes are in arrears, the seller credits the buyer for the period they owned the home.

Outstanding Liens and Payoffs

Any existing mortgage balance, home equity loans, mechanic liens, or judgment liens are paid from the sale proceeds at closing. The title company handles these payoffs directly.

HOA Transfer and Estoppel Fees

Typical cost: $150-$500.

If the property is in an HOA, the association charges fees for preparing transfer documents and estoppel letters (confirming the account is current). Some HOAs charge significantly more.

Seller Concessions

Sellers may agree to pay a portion of the buyer closing costs as part of the negotiation. This is common in buyer markets or when the buyer is stretching to afford the home. Typical concessions range from 1-3% of the purchase price. FHA allows up to 6% seller concessions; conventional loans allow 3-9% depending on down payment.

Total Seller Closing Costs Example

For a $400,000 home sale in a state with 0.5% transfer tax:

  • Agent commissions (5.5%): $22,000
  • Transfer taxes (0.5%): $2,000
  • Title fees: $800
  • Escrow fees: $1,000
  • HOA transfer fees: $300
  • Prorated taxes: $1,500
  • Buyer concession (2%): $8,000
  • Total: approximately $35,600 (8.9% of sale price)

Who Pays What: A Summary

  • Buyer typically pays: Loan origination, appraisal, home inspection, lender title insurance, recording fees, prepaid taxes/insurance, attorney fees (buyer side).
  • Seller typically pays: Agent commissions, transfer taxes, owner title insurance (in many states), HOA transfer fees, outstanding liens.
  • Split or negotiable: Escrow/settlement fees, survey, attorney fees, title fees (varies by state custom).

These are customs, not laws (except transfer taxes and recording fees). Everything is negotiable in a real estate transaction.

How to Negotiate Lower Closing Costs

For Buyers

  • Compare Loan Estimates. The TILA-RESPA rule requires lenders to provide a Loan Estimate within 3 business days of application. Compare line by line across multiple lenders.
  • Negotiate with your lender. Origination fees, underwriting fees, and processing fees are all negotiable. Ask for a fee reduction or credit.
  • Ask the seller for concessions. In a buyer market, sellers frequently contribute 1-3% toward your closing costs.
  • Close at month-end. This minimizes prepaid interest charges.
  • Shop title insurance. In most states, you can choose your own title company. Prices vary by 20-50% between providers.
  • Use a no-closing-cost loan. The lender covers your closing costs in exchange for a higher interest rate (typically 0.25-0.50% higher). Useful if you are short on cash but be aware of the long-term cost.

For Sellers

  • Negotiate agent commissions. Since the 2024 NAR settlement, commissions are more transparent and negotiable. Interview multiple agents and discuss rates.
  • Consider flat-fee or discount brokers. Some listing agents charge a flat fee ($3,000-$5,000) instead of a percentage, potentially saving thousands.
  • Limit concessions. Only offer buyer concessions if necessary to close the deal. In a seller market, concessions are rare.
  • Verify all charges. Review the closing statement carefully. Errors happen – duplicate fees, incorrect prorations, and unauthorized charges are more common than you would expect.

Estimating Your Total Cash Needed (Buyers)

The total cash you need at closing includes:

  1. Down payment: 3%-20% of purchase price
  2. Closing costs: 2%-5% of purchase price
  3. Reserves: Some lenders require 2-6 months of mortgage payments in reserve after closing
  4. Moving costs: $1,000-$5,000 (often forgotten)

For a $400,000 home with 10% down: $40,000 (down) + $12,000 (closing costs) + $5,000 (reserves) + $3,000 (moving) = approximately $60,000 total cash needed.

State-by-State Variation

Closing costs vary significantly by state due to differences in transfer taxes, attorney requirements, and title insurance regulations:

  • Lowest closing costs: Missouri, Indiana, North Dakota, Nebraska, Iowa (averaging 1.5%-2.5% for buyers)
  • Moderate closing costs: Texas, Florida, California, Ohio, Illinois (averaging 2.5%-3.5%)
  • Highest closing costs: New York, Connecticut, Delaware, Washington DC, Hawaii (averaging 3.5%-6%+ for buyers)

Always get state and county-specific estimates rather than relying on national averages.

The Closing Disclosure: Your Final Check

Federal law requires your lender to provide a Closing Disclosure at least three business days before your closing date. This document itemizes every fee, charge, and credit in the transaction. Compare it line by line against your original Loan Estimate:

  • Fees that cannot increase: Lender origination charges, transfer taxes
  • Fees that can increase up to 10%: Third-party services the lender selected (appraisal, title if lender-chosen)
  • Fees that can increase without limit: Services you chose (home inspection, survey, owner title insurance if you picked the provider)

If anything looks wrong, question it immediately. You have three days to resolve discrepancies before closing.

The Bottom Line

Closing costs are a significant but often overlooked part of buying or selling a home. Budget 2-5% of the purchase price as a buyer and 6-10% as a seller (including commissions). Shop every service, compare every fee, and review every document. The few hours you spend scrutinizing costs can save you thousands of dollars at the closing table.