Closing Cost Calculator

What are closing costs?

Closing costs are the fees and expenses paid at the settlement of a real estate transaction — above and beyond the property's purchase price. They're typically 2–5% of the purchase price for buyers and 6–10% for sellers (because sellers pay real estate commissions).

Common buyer closing costs

• Loan origination fee: 0.5–1% of loan amount, paid to the lender.
• Discount points: Optional, 1% of loan each, to lower the rate.
• Appraisal: $400–$700, required by the lender.
• Title insurance (lender's policy): $500–$3,500, protects the lender.
• Escrow / settlement fee: $300–$800.
• Prepaids: 6–12 months of property taxes and insurance, paid upfront into escrow.
• Transfer taxes: Vary by state — 0.01% to 2%+ of price.

Common seller closing costs

• Real estate commissions: 5–6% of price, typically split between listing and buyer's agent.
• Owner's title insurance: In some regions, the seller pays this — $500–$3,000.
• Transfer taxes: Same as buyer in some states; only seller in others.
• Escrow / attorney fees: $300–$1,000.
• Outstanding liens or repairs: Negotiated during the inspection period.

After a 2019 settlement, real estate commissions are now negotiable — historically 6% was the standard, but many sellers are now paying 4–5%. Always negotiate the commission when listing your home.

Frequently asked questions

What is the average closing cost for a buyer?

Buyers typically pay 2-5% of the purchase price in closing costs. On a $400,000 home, that's $8,000-$20,000. Costs are higher in states with high transfer taxes (NY, FL, WA) and lower in states with low or no transfer tax (AL, NC, MO).

What is the average closing cost for a seller?

Sellers typically pay 6-10% of the sale price — mostly real estate commissions (5-6%) plus transfer taxes, owner's title insurance (in some regions), and escrow fees. On a $400,000 sale, expect $24,000-$40,000 in total costs.

Can I negotiate closing costs?

Yes, especially in buyer's markets. Sellers may agree to 'seller concessions' — covering some or all of the buyer's closing costs. Lender fees, title insurance, and escrow fees are also negotiable. Always compare Loan Estimates from at least 3 lenders.

What is the difference between closing costs and prepaids?

Closing costs are one-time fees paid at settlement (origination, title, appraisal, etc.). Prepaids are recurring costs paid upfront into your escrow account — typically 6-14 months of property taxes and 12 months of homeowners insurance. Both are due at closing.

What is title insurance and do I need it?

Title insurance protects against title defects (undisclosed liens, heirs, fraud) discovered after purchase. Lender's title insurance is required by lenders. Owner's title insurance (optional but recommended) protects YOU. Cost is ~$500-$3,500, paid once at closing.

Are real estate commissions negotiable after the 2024 settlement?

Yes. Following the March 2024 NAR settlement, commissions are no longer automatically ~6% and must be negotiated upfront. Many sellers are now paying 4-5% total. Always negotiate the commission when listing your home — it's often the largest single closing cost.

What is an escrow impound account?

An account your lender holds to pay property taxes and insurance on your behalf. Funded monthly as part of your mortgage payment. Most lenders require impound accounts if your LTV is above 80% or for FHA/VA loans.

Glossary of key terms

Origination Fee

Fee charged by the lender to process the loan — typically 0.5-1% of loan amount.

Title Insurance

Insurance against title defects. Lender's policy required; owner's policy recommended.

Transfer Tax

State/local tax on real estate transfers. Ranges from 0.01% (Colorado) to 2%+ (Delaware, NY).

Prepaids

Upfront payments into escrow for property taxes and insurance — recurring costs, not one-time fees.

Seller Concessions

Credits from seller to buyer at closing, often used to cover buyer's closing costs. Common in buyer's markets.

Common mistakes to avoid

• Underestimating closing costs — many buyers show up at closing surprised
• Forgetting that prepaids (taxes, insurance) are due at closing in addition to fees
• Not negotiating real estate commissions — they're the largest single seller cost
• Choosing a lender based only on interest rate, ignoring fees
• Not budgeting for moving costs, immediate repairs, and furnishing the new home

Pro tips

• Compare Loan Estimates from at least 3 lenders — the standardized format makes apples-to-apples comparison easy.
• Negotiate real estate commissions — following the 2024 NAR settlement, 6% is no longer standard.
• Ask sellers for concessions in buyer's markets — they may cover some or all of your closing costs.
• Get owner's title insurance — protects you against title defects that could cost you the home.
• Budget 3% of purchase price for closing costs as a buyer, plus 1-2% for immediate repairs and furnishings.

Results are estimates for educational purposes only and not financial advice. Consult a licensed professional for advice specific to your situation.