Expect to pay about 8% to 10% of the sale price if you’re selling, and roughly 2% to 5% of the purchase price if you’re buying. That’s the shape of realtor fees and closing costs for buyers and sellers in a typical U.S. home sale. On a $400,000 home, the seller might part with $32,000 to $40,000 in total transaction expenses, while the buyer could owe $8,000 to $20,000 on top of the down payment. Where you land inside those ranges depends on your location, your financing, and what you negotiate into the contract.
How Much Are Real Estate Agent Commissions Now
Commissions are the biggest line item on the seller’s side. They’ve historically run 5% to 6% of the sale price, split between the listing brokerage and the buyer’s brokerage. On a $400,000 sale at 5%, that’s $20,000 pulled from the seller’s proceeds before anything else is paid. Nobody writes a check out of pocket for it; the settlement agent deducts it at closing and wires the funds to the brokerages.
Those percentages have been drifting downward since a National Association of Realtors antitrust settlement took effect in August 2024. By mid-2025, the average buyer’s agent commission had dropped to around 2.4%, and listing-side commissions have faced similar pressure. Combined rates for many deals now sit closer to 5% than 6%, and in some markets lower. The old assumption that 6% is fixed no longer holds.
What the NAR Settlement Changed
The settlement eliminated blanket commission offers to buyer’s agents through the Multiple Listing Service. Sellers can still agree to pay the buyer’s agent, but it now happens through direct negotiation rather than a default MLS field.
Any agent working with a buyer must also sign a written agreement before touring a single home, including virtual tours. That agreement has to state the exact compensation as a specific dollar amount or percentage, not an open-ended promise, and it must disclose conspicuously that commissions are negotiable and not set by law.
Practically, sellers should treat the commission as a negotiation point rather than a given. Buyers should know upfront what their agent will cost and where that money will come from. Sellers often still contribute toward the buyer’s agent fee as part of the purchase negotiations, but neither side is locked into a preset rate.
Other Costs the Seller Pays at Closing
Beyond commissions, sellers face a stack of smaller costs that collectively add 1% to 3% of the sale price. Most are deducted automatically from the seller’s proceeds at the settlement table.
Title Insurance
The owner’s title insurance policy protects the buyer against defects buried in the property’s ownership history, like undisclosed liens, forged documents in the chain of title, or recording errors. The seller typically pays for it. Premiums generally run about 0.5% of the purchase price, which is roughly $2,000 on a median-priced home. It’s a one-time payment with no ongoing premiums.
Prorated Property Taxes
Property taxes accrue daily, so the seller owes a prorated share covering the portion of the tax year they still owned the home. If the annual bill is $4,800 and the sale closes exactly halfway through the year, the seller gets a $2,400 debit on the settlement statement. The buyer picks up the tab from closing day forward.
Transfer Taxes
Most states and many local governments charge a transfer tax or documentary stamp fee when a deed changes hands. Rates typically fall between $1 and $10 per $1,000 of the sale price. On a $400,000 sale at $2 per $1,000, that’s $800. Some jurisdictions split the cost between buyer and seller; others assign it entirely to one side. Your contract and local custom decide.
Attorney Fees and Mortgage Payoff
Some states require an attorney to handle the closing; others don’t. Flat fees for a real estate attorney typically run from a few hundred dollars to around $1,000 depending on complexity, and hourly rates run $150 to $350 where charged.
If you still owe on your mortgage, the lender issues a payoff statement showing the exact amount needed to release the lien. Some servicers charge a small fee for the statement, though several states prohibit that charge. The payoff, including interest through the closing date, is wired directly to your lender from the settlement proceeds before you see anything.
What the Buyer Pays at Closing
Buyer closing costs cover everything from lender underwriting to government recording fees. Federal rules require your lender to send a Loan Estimate within three business days of receiving your mortgage application, breaking down every expected cost in a standardized format so you can compare offers.
Loan Origination Fee
The origination fee compensates the lender for evaluating and processing the loan. It typically runs 0.5% to 1% of the loan amount, so on a $320,000 mortgage you’d pay $1,600 to $3,200. Some lenders fold this into the interest rate instead of charging it upfront, which lowers closing costs but raises the monthly payment. The Loan Estimate will show which approach a lender is using.
Appraisal
Your lender requires an independent appraisal to confirm the property is worth at least the loan amount. The national average for a single-family home runs around $350, with most falling between $300 and $425. Complex properties, large acreage, or markets with few comparable sales push the cost higher. Federal rules bar lenders and borrowers from choosing the appraiser directly; the lender orders it through an independent management company.
Home Inspection
An inspection is for your benefit, not the lender’s. A general inspection covering the structure, roof, plumbing, electrical, and HVAC typically costs $300 to $425. Specialized follow-ups for radon, pests, mold, or septic add $100 to $300 each. Skipping it to save a few hundred dollars is a reliably regrettable choice given what a surprise foundation crack or failed sewer line costs.
Credit Report Fees
Lenders pull your credit from all three major bureaus during underwriting. This fee was historically modest (around $30) but has climbed in recent years, with some borrowers now seeing $75 or more per applicant.
Private Mortgage Insurance
If your down payment is less than 20% on a conventional loan, you’ll pay PMI. It can be structured as an upfront lump sum at closing, a monthly premium added to your payment, or a combination. Expect roughly 0.5% to 1.5% of the loan amount annually, depending on your credit score, loan-to-value ratio, and insurer. PMI drops off once you reach 20% equity.
Prepaid Interest and Escrow Funding
Two costs surprise many first-time buyers. The first is prepaid interest: your lender collects a per-diem interest charge covering the gap between your closing date and the end of that month. Close on the 25th of a 30-day month and you owe five days; close on the 2nd and you owe nearly a full month.
The second is the initial escrow deposit. Lenders who collect property taxes and homeowner’s insurance on your behalf need a starting balance to cover upcoming bills. Federal rules allow the servicer to collect enough for upcoming expenses plus a cushion of up to two months of escrow payments.
Recording Fees
County recorders charge to file the new deed and mortgage in the public record. Fees vary widely but are typically among the smallest closing costs, ranging from under $50 to a few hundred dollars depending on the number of documents and pages.
Extra Costs for FHA and VA Loans
Government-backed loans carry their own fee structures that replace or supplement private mortgage insurance and can add meaningfully to upfront costs.
FHA Mortgage Insurance
FHA loans require both an upfront mortgage insurance premium and an annual premium. The upfront premium is 1.75% of the base loan amount regardless of down payment or term. On a $300,000 FHA loan, that’s $5,250, though most borrowers roll it into the loan balance. The annual premium ranges from 0.15% to 0.75% of the loan balance depending on term, loan amount, and down payment. For most borrowers with terms longer than 15 years and down payments under 10%, the annual premium stays for the life of the loan.
VA Funding Fee
VA loans don’t require mortgage insurance, but most borrowers pay a one-time funding fee. For first-time users putting less than 5% down, the fee is 2.15% of the loan amount. It drops to 1.5% with 5% or more down, and 1.25% with 10% or more. Veterans using the VA benefit a second time pay 3.3% with less than 5% down. Veterans with service-connected disabilities are exempt entirely.
Negotiating and Shopping to Lower the Bill
Nearly every closing cost is negotiable to some degree, and the purchase contract is where the negotiation happens. The most common lever is a seller credit: the seller agrees to pay a lump sum toward the buyer’s closing costs, sometimes in exchange for a higher purchase price. Lenders cap seller concessions. VA loans limit them to 4% of the appraised value; conventional and FHA loans have similar caps that vary with the buyer’s down payment.
On the lending side, you can sometimes negotiate the origination fee or ask for lender credits that offset closing costs in exchange for a slightly higher interest rate. That tradeoff makes sense if cash is tight at closing but you plan to refinance or sell within a few years. Shopping multiple lenders is the single most effective way to reduce these costs; Loan Estimates use a standardized format precisely so you can lay them side by side.
Title insurance premiums, often treated as fixed, can also be shopped in most states, and the differences on a high-value property can be meaningful. Where the seller pays for the owner’s policy, buyers can still shop separately for their own lender’s title policy.
Taxes on the Money You Walk Away With
Profit from selling your home may be tax-free if you meet the ownership and use tests under federal tax law. You can exclude up to $250,000 in capital gains from your income if you owned and lived in the home as your primary residence for at least two of the five years before the sale. Married couples filing jointly can exclude up to $500,000 if at least one spouse meets the ownership test and both meet the use test. The exclusion can only be claimed once every two years.
Your taxable gain isn’t just the sale price minus what you originally paid. You reduce it by adding capital improvements to your cost basis: a new roof, a room addition, a kitchen remodel, new central air, rewiring. Routine maintenance and repairs don’t count, but anything that adds value, extends the home’s useful life, or adapts it to a new use qualifies. Keeping receipts for major improvements over the years can save thousands when you sell.
At closing, the settlement agent or closing attorney typically files a Form 1099-S reporting the transaction to the IRS. If you certify in writing that the home was your principal residence and the sale price was $250,000 or less ($500,000 or less for married sellers), the closing agent may be exempt from filing. If your gain exceeds the exclusion limits, or you don’t meet the ownership and use tests, you’ll owe capital gains tax on the excess. Talk to a tax professional before closing to sort out withholding and estimated tax payments.