The Ultimate Guide to Seller Closings Costs

Learn about all the common fees that need to be paid at the closing when you sell your home and find out how you can save

Many assume that when they sell their home, their gains will equal the sales price minus the present balance on their mortgage. But that doesn’t take into account the closing costs. 

You may be disregarding a large chunk of potential costs that could impact whether or not you sell your home now. To help you better understand the various fees you can expect to pay, here is a breakdown of the typical real estate closing costs for sellers.

What are Closing Costs?

Closing costs refer to all the various fees that need to be paid at the closing of a real estate transaction. The buyer and the seller are each responsible for paying different fees related to the closing process. They pay the various companies and professionals involved in the transaction including attorneys, real estate agents, title companies, homeowner’s associations, etc. Not to mention the taxes. 

Why Do Closing Costs Exist?

Selling a home isn't like selling a T-shirt or a gallon of milk. It's a very complex transaction with many parties involved who need to collaborate and handle specific tasks for the process to go smoothly. Plus, you'll also need to pay various taxes to the state and local governments to fund public services such as schools, roads, and police departments.

Closing costs are all the various fees and taxes that ensure the transaction is legitimate from a legal standpoint. The buyer will pay their own closing costs related to obtaining financing and evaluating the condition of the home. But you will also need to pay certain closing costs when selling a house to finalize the transition and pay your taxes. 

sales contract with a pen 

What Closing Costs Are Sellers Expected to Pay?

Although both the buyer and the seller pay their own closing costs, the fees that are expected to be paid are unique. Plus, it can vary depending on the transaction, where you live, and who you choose to hire. Here are some of the typical closing costs sellers often pay. 

Real Estate Agent Commissions

Traditionally, real estate commissions for both the buyer and the seller's agents were deducted from the seller's profits on the sale. However, a recent lawsuit against the National Association of Realtors in 2024 may change who pays the buyer's agent in the future. Either way, if you're hiring a real estate agent to sell your home, you will be expected to pay them a commission at the closing, which is often one of the largest closing costs sellers have to pay.

Transfer Taxes

Some states have a transfer tax, which is due whenever you transfer the title of a property from one party to another. Not all states have a transfer tax, so you may want to do some research or ask your agent if you're uncertain. 

Title Fees

Title fees refer to the costs associated with transferring the ownership of the home from the seller to the buyer. In some places, it's customary for the buyer to pay the title fees, while in others, it's up to the seller. But either way, they usually don't add up to more than a few hundred dollars.

Property Taxes 

Just because you sell the home before your tax bill is technically due doesn't mean you're off the hook completely. Sellers are still expected to pay their portion of any unpaid property taxes related to how much of the year they retained ownership of the home. After that, it's the buyer's responsibility. 

So if you sold the home on July 2nd (the exact middle of the year), you would pay 50% of the tax bill, and the buyer would pay 50%. If you're unsure of how much you will owe in taxes at closing, consult the purchase agreement to determine your responsibilities or talk to a tax professional if needed.

Other Closing Costs
  • HOA fees: If you have a homeowners association, you'll need to ensure your fees are fully paid up through the closing date before you can finalize the sale.
  • Escrow and closing fees: Escrow fees refer to the costs paid to an escrow company, title company, or real estate attorney that cover the costs of transferring funds from the buyer to the seller during the closing.
  • Attorney fees: If you plan on having legal representation to review the contract and/or conduct the closing, they'll collect their fee once the transaction is finalized.

How to Calculate Closing Costs for Sellers

With so many different closing fees, it can get somewhat overwhelming. So you may want to know exactly how to estimate closing costs for sellers. As a general rule of thumb, sellers can typically expect to pay about 6-10% of the sales price in closing costs. So, if you sell the home for $500,000, expect to spend anywhere from $30,000 to $50,000 on closing costs.

However, it can be higher or lower depending on where you live. For instance, the average closing costs in NYC are about 8-10% of sales price. So, if you want a more accurate estimate, you can use a seller closing cost calculator or consult your real estate agent to see if they can provide a rough estimate of what is standard for your area.

Person holding a stack of hundred dollar bills 

Do Closing Costs Differ Depending on Where You Live?

Yes, closing costs can vary depending on the state, county, or even the building where you live. They can also fluctuate based on who you have on your team and the services you use.

For instance, if you choose to go for sale by owner route, you won't be required to pay a broker. Not all states require you to have your own legal representation at closing, so you can save on attorney fees by simply using a title company to complete the transaction.

However, don't fall into the trap of going it alone just to save money, as proper representation can often help you get a higher price for your home and avoid mistakes that will cost you more in the long run.

Some closing costs are also state or county-specific. For instance, your property tax obligations will vary depending on where you live. Plus, some states have transfer taxes, and some don't. 

HOA fees are unique to the particular community where you live, and some sellers won't have to worry about them at all. So, while the total usually falls within a certain range no matter where you live, individual fees can vary dramatically from place to place.

Person with a pen and a contract 


What Are Some NYC-Specific Closing Costs?

On that note, let's discuss a few closing costs specific to New York City. Seller closing costs in New York State are often among the highest in the country. However, if you think ahead, you can find ways to save. Here are a few of the common closing costs for sellers in NYC.

Transfer Tax

NY seller closing costs include a transfer tax paid to both the state and city. New York State charges 0.4% for homes worth less than $3 million and 0.65% for anything above $3 million. The NYC transfer tax is 1% for co-ops, condos, and 1-3 family houses worth $500,000 or less and 1.425% for anything above that. So expect to pay anywhere from 1.4% to 2.075% in transfer taxes as part of your closing costs in NYC.

Mansion Tax

New York State also imposes what is called a mansion tax on homes worth over $1 million or more. The tax is a percentage of the purchase price that ranges from 1% to 3.9%, depending on the final sales price. Mansion taxes are usually paid by the buyer, however, if for whatever reason the buyer is exempt from paying, the responsibility falls on the seller. 

Flip Tax

A flip tax is a specific co-op closing cost in NYC that is imposed on a seller by the building. It's not exactly a tax, as the fee goes to the co-op board, not a state or local government. 

It's a practice that started in the 1980s when many rental buildings were being converted into co-ops, and owners found they could flip their units for a large profit. The co-op boards wanted a cut of the action to build up a reserve fund, so they began charging a flip tax every time someone sold their interest in a unit. 

The exact fee can vary, but it typically adds about 1-3% of the sales price to co-op closing costs in NYC.

Move-in and Move-Out Fees

Many co-op and condo buildings also charge additional move-in and move-out fees to cover things like cleaning the unit or any damages. These fees vary depending on the building and not all change them, but be prepared to pay an additional $500 - $1500 in move-in move-out fees when paying New York condo closing costs.

How Can You Save on Closing Costs?

Although seller closing fees in NYC can get expensive, if you're proactive, you can save money. Here are a few ways to save on seller closing costs in NYC.

Negotiate Better Rates

Everything is negotiable so don't be afraid to make a counteroffer when hiring an attorney, title company, escrow company, or any other professional service you plan to use. If one party won't budge, you can always see what else is out there and try to find a cheaper option that makes sense for your situation.

Negotiate with the Buyer

If you know the buyer is highly motivated, you may be able to convince them to cover some of your closing costs. For instance, they may be willing to cover your share of the property taxes if it will guarantee that you will accept their offer. Although you'll likely need a good bit of leverage and interest from other parties to make it work.

Use a Purchase CEMA

A purchase consolidation extension modification agreement (or CEMA) is a legal instrument that allows the buyer to essentially take over the seller's existing mortgage and consolidate it with a new loan. It's a bit complex and will require an attorney to draft it, but it allows you to avoid paying certain closing costs, such as transfer taxes.

Need help selling your home? Reach out to our sales team and let us know what you’re looking for. By building personal relationships with our clients and taking the time to understand your needs, we take the guesswork out of buying homes in NYC. Get in touch today to start your journey toward finding the ideal space.

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