When you sell your home, the check you receive at closing is significantly less than the sale price. Closing costs for sellers typically total 7% to 10% of the sale price, meaning on a $400,000 sale, you can expect to pay $28,000 to $40,000 in fees, commissions, and other expenses before you see your net proceeds. Understanding every line item helps you set realistic expectations, price your home appropriately, and avoid unpleasant surprises on closing day.
Real Estate Agent Commissions
Agent commissions have traditionally been the largest closing cost for sellers, typically totaling 5% to 6% of the sale price split between the listing agent and the buyer’s agent. On a $400,000 sale, that’s $20,000 to $24,000.
However, the real estate commission landscape has been changing significantly. Following the NAR settlement in 2024 and ongoing industry shifts, commission structures are becoming more variable and negotiable. Some listing agents now charge flat fees, reduced percentages, or tiered structures based on the sale price. Buyer agent compensation is also increasingly negotiated separately.
Despite the cost, the data consistently shows that homes sold with professional agents achieve higher prices than those sold by owners. The commission often pays for itself through better pricing, broader marketing, stronger negotiations, and smoother transaction management. Our article on FSBO vs. using a real estate agent examines the complete numbers.
Title and Escrow Fees
Title Insurance
In many states, the seller pays for the buyer’s title insurance policy, which protects the buyer and their lender against title defects discovered after closing. Title insurance premiums are regulated in many states and typically cost $500 to $2,000 depending on the sale price and location. Some states split title insurance costs between buyer and seller, while others follow local customs that assign the cost to one party.
Escrow and Closing Fees
The escrow or closing company that manages the transaction charges fees for their services, typically $500 to $2,000. These fees cover document preparation, fund management, recording, and coordination between all parties. In some markets, buyers and sellers split these fees. In others, one party traditionally covers the full amount.
Title Search
A title search examines public records to confirm that you have clear, transferable ownership of the property. The cost is typically $200 to $400 and is sometimes included in the escrow company’s overall fee.
Transfer Taxes and Recording Fees
Most states and some municipalities charge a transfer tax when property changes hands. These taxes vary widely, from zero in some states to over 2% of the sale price in others. On a $400,000 sale, transfer taxes could be nothing or could exceed $8,000 depending on your location.
Recording fees for the deed transfer and mortgage satisfaction documents typically run $50 to $250 and are paid to the county recorder’s office.
Prorated Property Taxes
Property taxes are prorated between buyer and seller based on the closing date. If you’ve prepaid taxes for a period that extends beyond the closing date, you’ll receive a credit. If taxes are due and unpaid, the amount owed for your portion of the year will be deducted from your proceeds at closing.
Mortgage Payoff
If you have an existing mortgage, it will be paid off from your sale proceeds at closing. The payoff amount includes the remaining principal balance plus any accrued interest through the closing date. Request a payoff statement from your lender in advance so you know the exact amount. Note that the payoff amount is typically slightly higher than your current balance because of accrued daily interest. Our article on selling a house with a mortgage covers this in detail.
Seller Concessions
During negotiations, you may agree to pay some of the buyer’s closing costs as a concession to close the deal. Seller concessions typically range from 1% to 3% of the sale price and are used by buyers who need help covering their upfront costs. While concessions reduce your net proceeds, they can be an effective tool for keeping a deal together, especially when the buyer offers a higher purchase price to offset the concession.
Home Warranty
Some sellers offer a home warranty to the buyer as part of the sale, covering the cost of repairs to major systems and appliances during the first year of ownership. A standard home warranty costs $400 to $700 and can be a valuable negotiating tool that gives buyers confidence in the purchase without a large expenditure on your part.
Repair Credits
If the home inspection leads to negotiated repair credits, these amounts are deducted from your proceeds at closing. The amount varies based on the inspection findings and the negotiation between you and the buyer. Our seller’s guide to home inspections covers how to manage this process.
Other Potential Costs
Additional closing costs that may apply include HOA transfer fees if you’re in a homeowners association community, typically $200 to $500. Attorney fees in states that require attorney involvement in closings, typically $500 to $1,500. Pest inspection or clearance fees if required by your state or the buyer’s lender, typically $75 to $200. Payoff of any liens, judgments, or unpaid assessments against the property.
Estimating Your Net Proceeds
To estimate what you’ll actually pocket from the sale, start with the expected sale price and subtract all of the costs outlined above. Your agent should provide a seller’s net sheet early in the process that estimates your net proceeds based on your expected sale price, known costs, and any outstanding mortgage balance.
For example, on a $400,000 sale with a $200,000 remaining mortgage balance, your closing costs might break down as approximately $22,000 in commissions, $2,500 in title and escrow fees, $2,000 in transfer taxes, $1,500 in prorated taxes, $500 in miscellaneous fees, and $200,000 in mortgage payoff. That leaves approximately $171,500 in net proceeds before any repair credits or seller concessions.
How to Minimize Your Closing Costs
While some closing costs are fixed or legally required, others are negotiable. Shop title and escrow companies for competitive rates. Discuss commission structures with potential listing agents. Negotiate for the buyer to cover their own closing costs rather than agreeing to seller concessions. Address inspection items proactively to minimize repair credit demands.
The most impactful way to maximize your net proceeds is to sell for the highest possible price through effective preparation, pricing, and marketing. Every dollar added to the sale price flows directly to your bottom line. Connect with a top-performing listing agent through our free matching service who can help you maximize your sale price while managing costs effectively. For the complete selling strategy, visit our ultimate guide to selling your home.