Closing costs are simply expenses paid at the end of a real estate purchase; the term encompasses just about every little fee and payment made by both the buyer and the seller. Some are negotiable or optional, while others are fixed and mandatory, but the total amount that is paid in closing costs will vary significantly. In most cases, closing costs for the buyer will be around 2% to 5% of the total purchase price. This means you’ll pay roughly $2,000 to $5,000 in closing costs for every $100,000 worth of home value.

Typical Closing Costs for Sellers

Sellers also pay closing costs, including one of the largest closing fees…

• Mortgage Broker Commission: The mortgage broker will receive compensation for their work, and this fee will be paid by the seller.
  
  
• Mortgage Lender Title Insurance: There will also be title insurance costs that are paid by the seller. However, this title insurance policy will be used to protect the buyer against future claims to their property.
  
  
• Sales Commission: Although the buyer will have to pay for the vast majority of closing fees, the seller will have to pay one of the largest: the seller’s agent’s commission. This fee usually costs about 6% of the total purchase price, but the specifics will depend on the contract between the seller and real estate agent.
  
  
• Warranty: This is an optional fee, but many buyers will request them. This is a policy that will protect the buyers financially if anything major goes wrong with the home, such as a breakdown of the furnace.