Seller closing costs usually run 1% to 3% of the sale price before agent commissions, and roughly 6% to 10% once commissions are included. The exact number depends on where the home is, what you negotiated with your listing agent, and how much you still owe on the mortgage. You rarely write a check for any of it. The escrow or settlement agent subtracts every cost from your gross sale price and wires you what’s left.
Here is what tends to show up on a seller’s side of the ledger, and roughly what each line costs.
Agent Commissions
Commissions are almost always the biggest cost. The national average total commission sits around 5% to 6% of the sale price, typically split between the listing agent and the buyer’s agent. On a $400,000 home, that works out to $20,000 to $24,000 coming straight off your proceeds.
How commissions are set up changed in August 2024 after a legal settlement involving the National Association of Realtors. Offers of compensation between agents are no longer allowed on MLS platforms, though sellers can still offer buyer concessions on the MLS or negotiate agent compensation off the MLS entirely. You still negotiate a commission rate with your listing agent in a signed, legally binding agreement. Whether you also pay the buyer’s agent is now a separate conversation. Some sellers still offer it to attract more buyers; some don’t, in which case the buyer covers their own agent’s fee. Buyer agents must also sign written agreements with their clients before touring homes, spelling out what they’ll be paid.1National Association of REALTORS. What the NAR Settlement Means for Home Buyers and Sellers
Every piece of commission is negotiable. In a fast market you have more room to push the listing rate down. If you decide not to offer buyer-agent compensation up front, some buyers may still ask you to cover it as part of the purchase negotiation, so factor that possibility in before you set your bottom line.
Transfer Taxes
Most states impose a tax when real property changes hands, variously called a transfer tax, excise tax, or documentary stamp tax. About 36 states and the District of Columbia charge some version of it; roughly 14 states charge none. Rates are calculated per $100 or $1,000 of the sale price and range from a fraction of a percent to over 1.5% in high-cost jurisdictions. Some cities add a municipal transfer tax on top of the state rate, which pushes the combined total higher in places like New York or Chicago.
Who pays depends on local custom and on what your purchase agreement says. In many markets the seller covers it; in others it’s split or shifted to the buyer. Because the bill can easily run into the thousands on a moderately priced home, confirm the rate and the allocation with your agent or closing attorney before you estimate net proceeds.
Title Insurance, Escrow, and Attorney Fees
In most transactions the seller pays for an owner’s title insurance policy that protects the buyer against future claims on the property, including undisclosed liens, forged documents in the chain of title, and boundary disputes that existed before the sale. The cost typically falls between $1,000 and $3,000, depending on the sale price and how complicated the ownership history is.
If the home was purchased or refinanced recently, ask whether the title company offers a “reissue rate.” Because a full search was done not long ago, some insurers cut the premium significantly. Eligibility rules and time limits vary by company and by state, but it’s one of the few closing costs a single question can reduce.
Escrow or settlement agents charge separately for running the closing itself. They collect signatures, hold funds, and confirm every condition in the purchase agreement is satisfied before disbursing money. These fees generally run from $500 to $2,000. In roughly half the states, an attorney must supervise or conduct the closing, which can add another $500 to $2,000 or more.
Mortgage Payoff and Prorations
Before title can transfer clean, every debt secured by the home has to be paid. The settlement agent requests a payoff statement from your mortgage lender showing the exact balance, down to the daily interest accrual.2Fannie Mae. Calculating and Obtaining Confirmation of Payoff Amount A home equity line of credit, second mortgage, or any other recorded lien also gets paid from your proceeds.
Most residential mortgages taken out since 2014 cannot carry a prepayment penalty, because federal rules ban them on “qualified mortgages,” which covers the vast majority of conventional, FHA, VA, and USDA loans. If you have an older loan or a non-qualified product, check your loan documents. A prepayment penalty on the settlement statement is an unpleasant surprise.
Property taxes and HOA dues are prorated to the exact day ownership transfers. If you’ve already paid the full year’s property tax bill, the buyer credits you for the portion of the year you won’t own the home. If your taxes are paid in arrears, which is the common arrangement, the settlement agent debits your proceeds for the unpaid period so the buyer doesn’t inherit the obligation. HOA dues work the same way, and if the community charges a transfer or resale certificate fee, that typically runs a few hundred dollars on the seller’s side.
Seller Concessions to the Buyer
Buyers often ask sellers to contribute toward their closing costs as part of the negotiation. You might agree to cover part of the buyer’s loan origination fees, prepaid insurance, or other settlement charges. Those concessions come straight off your proceeds like any other cost.
Lenders cap how much a seller can contribute, and the limits depend on loan type and the buyer’s down payment. For conventional loans backed by Fannie Mae, the sliding scale is:
- Down payment under 10% (LTV above 90%): up to 3% of the sale price
- Down payment of 10% to 24.99% (LTV 75.01%–90%): up to 6%
- Down payment of 25% or more (LTV 75% or less): up to 9%
- Investment properties: up to 2% regardless of down payment
Concessions beyond these limits get treated as a reduction in the sale price, which can create appraisal problems.3Fannie Mae. Interested Party Contributions (IPCs) VA loans cap seller concessions at 4% of the home’s reasonable value.4U.S. Department of Veterans Affairs. VA Funding Fee and Loan Closing Costs FHA loans allow up to 6%. In a buyer’s market, agreeing to concessions can make your listing more attractive, but run the numbers before you say yes.
Smaller Line Items
Several smaller charges show up on most seller settlement statements. None of them individually changes the deal, but together they can add up to several hundred dollars:
- Recording fees: the county charges to record the deed transfer and mortgage satisfaction, typically $125 to $500.
- Wire transfer fee: the escrow company charges $25 to $75 to wire your net proceeds.
- Notary fees: a mobile notary for document signing usually runs $40 to $150.
- Home warranty: some sellers buy the buyer a home warranty as a negotiating sweetener, around $300 to $700 for basic coverage.
Repair credits catch sellers off guard. After the home inspection, a buyer may ask you to fix specific issues or offer a credit toward repairs. It isn’t technically a closing cost, but it shows up on the settlement statement as a deduction from your proceeds all the same.
Taxes on the Gain
If the home has appreciated since you bought it, the profit may be taxable, though most sellers owe nothing because of a generous federal exclusion. You can exclude up to $250,000 in capital gains from the sale of your primary residence, or up to $500,000 if you’re married and file jointly.5Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence To qualify, you need to have owned the home and used it as your primary residence for at least two of the five years before the sale. The two years don’t need to be consecutive. For joint filers, both spouses must meet the use requirement; only one needs to meet the ownership requirement.6Internal Revenue Service. Topic No. 701, Sale of Your Home
Even when the sale is tax-free, the transaction still gets reported. The title company or settlement agent files Form 1099-S with the IRS showing the total sale price. One exception: if the sale price is $250,000 or less ($500,000 for married sellers) and you certify in writing that the full gain is excludable, the closing agent doesn’t have to file the 1099-S.7Internal Revenue Service. Instructions for Form 1099-S (Rev. December 2026)
FIRPTA Withholding for Foreign Sellers
If you’re a foreign national selling U.S. real estate, the buyer must withhold 15% of the total sale price under the Foreign Investment in Real Property Tax Act and send it to the IRS.8Internal Revenue Service. FIRPTA Withholding That’s 15% of the sale price, not 15% of your profit. On a $400,000 sale, $60,000 is held back regardless of whether you made or lost money. You can file a U.S. tax return afterward to claim a refund of any amount withheld beyond your actual tax liability, but the money is tied up until the IRS processes the return. Applying for a withholding certificate in advance can sometimes reduce the amount held at closing, so talk to a tax professional before you list.
Reading the Settlement Statement
Every cost above lands on one document: the settlement statement, often called an ALTA statement after the American Land Title Association, which developed the standardized format.9American Land Title Association. ALTA Settlement Statements There’s a seller-specific version showing only your side: every debit for commissions, taxes, prorations, lien payoffs, and fees, alongside any credits you’re owed.
The escrow or settlement agent prepares the statement and subtracts everything from the gross sale price before disbursing what remains. You should see a preliminary version a day or two before closing. Go through it line by line. Math errors, surprise charges, and misallocated fees are far easier to fix before the wire goes out than after. Once payments are confirmed and the deed is recorded, you receive your net proceeds by wire or check.