Skip to main content


A Quick Guide to Closing Costs When Selling Your Home

A Quick Guide to Closing Costs When Selling Your Home

The real estate business has been booming for the last few years. So much so that the “spring market” keeps moving up in the year. People right now are already gearing up for another bustling season.

If you are a new seller, you may be wondering what closing costs you are responsible for. These vary by location and the type of property you are selling.

The good news is that once you understand the common ones that exist in your area and what impacts those costs, you will know what to expect.

This quick guide to seller closing costs will help you navigate these. You can be confident selling your home without any surprises during the transaction.

What Are Closing Costs?

Closing costs are a general term used to describe fees involved in a real estate transaction. These include fees for escrow accounts, loan origination, title insurance, and legal services. They usually amount to between 1 and 5 percent of the loan amount.

Note that closing costs are distinct from commissions buyers and sellers pay to real estate agents. These vary by market, but they are usually 5 to 6 percent of the property value for sellers. While these are often paid at closing, they are not necessarily categorized as "closing costs."

Common Seller Closing Fees

In most transactions, buyers and sellers determine who pays what part of the necessary fees. So, almost all the fees listed above are subject to negotiation.

Sellers must pay transfer taxes. These are usually ad valorem taxes, meaning they are based on the price of the property, set by state or local jurisdictions, but not always. Some locations have base fees applied to each translation.

Note that these are distinct from property taxes, which recur annually. They also are different from estate taxes, which are paid on the assets of a deceased party.

Sellers sometimes pay for title searches and title insurance, although often, the buyer pays these. They cover the costs of researching the property’s title to ensure there are no liens or other reasons the transaction cannot go forward. Insurance protects the seller against any future claims against the title.

Another cost that the seller may pick up but is often shared is escrow fees. These vary based on the time of year you sell the property relative to paying taxes on it in that given year. They cover the cost of using an escrow service to hold funds during the closing process.

Sometimes sellers pay attorney fees for the closing. These are often based on hourly fees and do not vary based on the value of the property.

Finally, if the property is part of a homeowner’s association, the seller should be current on those dues. While these can be prorated, the seller sometimes pays for the year in which the transfer is made.

Learn More About Seller Closing Costs

We hope you found this seller closing cost guide helpful. Now that you understand the basics of closing costs, you can know what to expect going forward in selling your property.

We started AZ to give home sellers an alternative that simplifies the process. We provide customer terms to accommodate your unique circumstances. If you are selling your property in Phoenix or the surrounding areas, reach out to us today to schedule a free consultation.