Must seller and buyer pay closing costs?

Asked by Val Lopez, Sat Sep 13, 2008

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Cody Waters, , 78258
Wed Sep 17, 2008
Ok, the language used here is misleading. I see answers that are just incorrect. As a seller you pay your own closing costs which include RE fee's. This is probably what you are talking about. The buyers have their own set of fee's and closing costs that they must come up with outside of what you are paying. What happens is a lot of the time a buyer will not have the money to put down for their side of the closing costs so they ask the seller to pay a portion or even most of them. (4%max). You have the option of accepting or declining.

Some advice to you as a seller is look past the details of the items in the contract and focus on your "net". Someone who offers you a "clean offer" but it is 20k less then asking price could be the same as an offer jumbled with closing costs, repairs, home service plan, etc. as far as the $$$ in your pocket. Your Realtor should bring you a net sheet showing you what you should walk away with.


Cody Waters
3 votes
beverly gain…, Home Buyer, Tallahassee, FL
Sat Mar 1, 2014
Good morning. I am in Florida. I am offering the seller cash for his property. The buyer's estimate is asking for me to pay the title insurance, appraisal fees,recording fees, survey, property inspection and pre-paid hazard insurance. What is practical.
0 votes
Jason Campbe…, Agent, San Antonio, TX
Fri Dec 17, 2010
Ok.. let's get to the REAL answer now.. The only closing costs that the buyer CANNOT PAY are those specified as "Buyer Non-Allowable" closing costs under a VA or FHA loan...

The real answer is... The seller could pay ALL the closing costs or NONE of the closing costs depending on how the contract is negotiated.

For example... if the buyer is paying cash, or has a loan that does not have any buyer non-allowable costs involved, as seller in theory could negotiate that the buyer pay both "buyer" and "seller" closing costs and in that case... the Buyer was the only one who paid closing costs... On the other side of the coin... if the buyer negotiates to have the seller pay every dime of the closing costs... then only the seller paid...

Best thing to do is have a good solid estimated net sheet be provided to you when you get an offer... see what you will end up with when the smoke clears...

Now.. in the Real World... There are some costs that are "customary seller" costs... meaning that in most cases, these are most often paid by the seller... things like Realtor fees, title policy, survey, and title company fees. All things are negotiable... But in most cases, buyers make offers asking the seller to pay some or all of their closing costs..
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Scott Godzyk, Agent, Manchester, NH
Sun Sep 14, 2008
yes... there are designate costs for buying and selling property. the seller will pay for example commission, deed prep, courier fee to pay off mortg and state re tax. the buyer for example will pay the closing company a fee for closing, any points to the mortgage company, recording fees for the mortgage and deed, any state taxes, prepayment interest, prorated taxes, escrows and title search to name a few. You may when negotiating a purchase agreement ask the seller to pay these fees, most banks will allow the seller to pay up to 3% of the closing costs. Good luck with your purchase Val
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Viktor Taush…, Agent, Dallas, TX
Sun Sep 14, 2008
As everything in a real estate transaction, who will pay the closing cost and what part of it is negotiable. A lot of buyers ask for money towards the closing cost. There are bunch of options during the negotiation.
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T.E. & Naima…, Agent, Dallas, TX
Sun Sep 14, 2008

A sale of real property has 3 components: the property price, the costs of closing the transaction, and any prepaid items related to the property.
Generally, the lender of the Buyer (the Borrower) pays all the prepaid items. Typically, these are house insurance, escrowed amounts for house insurance and taxes. During the latter part of the year, the taxes are also prepaid. The Buyer and Seller prorate the taxes due, based on when the closing is during the year -- the later in the year, the less the Buyer contributes.
The closing costs include fees charged by the lender, costs incurred related solely to the loan, like appraisal, survey, flood certification and so on. In addition, buyers usually demand title insurance to protect their ownership of the property. (This is not homeowners insurance. It is designed to cover underdiscovered liens or claims on the property itself, not house or liability perils.) Also, the escrow agent or title company charges for its services. As pointed out, these items are all negotiable prior to signing a contract as to who will pay for what.
Customarily, the Seller pays for title insurance and may also contribute toward the Buyer's other costs. Title expenses, other than title insurance, are usually split in half, but recording fees and the like typically belong to Borrower/Buyer. Prepaids almost always wind up on the Buyer's side.
Can you convey a property without paying any costs other than the sales price? Possibly, but there are pitfalls. Deeds should be prepared by competent legal counsel, otherwise they may not stand up or other unexpected consequences may result. The costs of document preparation are nominal and highly recommended. While not required, title insurance or at least an opinion of legal ownership from an attorney is essential. Part of the title insurance is the cost of doing a title search to warrant title in the property.
Recording is also essential. Once title has transferred on paper, without recording the event, it is conceivable that another transfer can be recorded first and override the deed. Title companies take great care to ensure deed and other closing documents are properly prepared and recorded in a timely fashion. Inspections and survey, even though the lender may be very interested in them, really give the Buyer some degree of assurance of the location of the property, any possible encroachments on or by the current owner, and the condition of the property. Lenders may not always require a survey, but an inspection is recommended for the Buyer's peace of mind.
The loan-related fees might be rolled into the loan and disappear as separate line-items, but the functions are still performed. The Borrower's loan officer needs to make a living, the person who processes the loan documents, the underwriter, the people who check on back taxes, the people who check whether the property may be at risk for flooding, the drivers who shuttle documents back and forth, and of course any credit checks. Yes, it is a long list, and often people deprecate them by referring to them as "junk fees" but they are actual costs borne by the lender. Some lenders hide them completely from view and call their loans "zero closing cost" mortgages, but Borrower's still pay them -- just not openly.
You'll have to make the judgment call as to whether you want to pay the costs of closing, but you might start by talking to a title company and explain to them what you want (and why you don't want a particular service performed). Lenders will be less than receptive to short-cutting the process, though. So, a Borrower will have a difficult time avoiding costs, although he may not know he is paying for them. And a Buyer who does not cover all the possible ways a conveyance can go wrong, may wake one morning on the street.
Who pays for the closing costs between Buyer and Seller is generally negotiable.
T.E. Sumner
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Keith Sorem, Agent, Glendale, CA
Sat Sep 13, 2008
You have some very interesting answers.
My response is that in all real estate transactions there are closing costs. Most are either the cost of conducting a sale or mandated by law.

So perhaps to further clarify, everything is negotiable in a real estate transaction. In terms of who pays for what. However, that being said, in most cases what the seller and buyer are willing to agree affects timing and pricing.

In most sales the seller is required to pay at least one or maybe more transfer taxes. In most purchases the buyers are already paying "a lot" so buyers normally pay a smaller share of the closing costs because they are not paying the transfer fees.

If you are interested in selling for the most profie, then I would be honored to refer a Top Realtor who can negotiate and answer your questions.

Best of luck to you!
0 votes
Matt Stiglia…, Agent, San Antonio, TX
Sat Sep 13, 2008
You definitely can structure an offer so that either party pays more or all of closing costs. As long as both parties agree to those terms, you're good to go. Some associated costs (title policy and survey for instance) have their own sections on the offer/contract to determine who will pay for them. With the larger inventory of homes available on the market right now here in San Antonio it is not unheard for sellers to make concessions to the buyer in order to help get their home sold.

Good luck and feel free to ask any questions you might have.

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Dallas Texas, Agent, Dallas, TN
Sat Sep 13, 2008
It depends on how your sale purchase contract terms and conditions. However both seller & buyer do have closing costs. Purchaser can request for seller make closing contributions.
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Bob Waters, Agent, Chesterfield, MO
Sat Sep 13, 2008
Unless your sales contract has special terms and conditions that have been agreed to by both parties stating that one party is absorbing all reasonable and customary closing costs for both parties then it is typical for the Buyer and Seller to have and pay for their own closing costs. Your agent and the title company should be able to give you reasonable estimates of what those costs should be.
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