Closing costs are the fees and expenses, beyond the down payment, that buyers and sellers pay at the closing of a real estate transaction when the property title is transferred. These costs typically include appraisal fees, attorney fees, escrow funds, loan origination fees, title insurance, taxes, and recording fees, among others
. For buyers, closing costs generally range from about 2% to 5% of the home's purchase price, while seller closing costs can be higher, often between 8% to 10% of the sale price due to agent commissions and other fees
. For example, on a $400,000 home, buyer closing costs might range from $8,000 to $20,000
. Buyers usually pay most of these fees, but some costs can be negotiated or shared with the seller
. By law, lenders must provide a closing disclosure statement to buyers outlining all closing fees at least three business days before closing
. Closing costs are a one-time payment required to finalize the home purchase.
