Closing cost split
Closing Cost Split Calculator (Buyer vs. Seller)
Decide who pays what at closing. Set each cost to buyer, seller, or split, prorate this year's property taxes, and apply earnest money and seller credits to see the buyer's cash to close and the seller's net proceeds.
Example Use
Example: on a $400,000 purchase with a $320,000 loan, typical defaults put about $9,400 of costs on the buyer and $24,700 on the seller, mostly commissions. A seller credit and the property tax proration then move money between the two columns before closing.
Who usually pays which closing costs
Buyers typically pay the costs tied to their loan: origination and lender fees, appraisal, the lender's title insurance policy, recording the new mortgage, and prepaid interest, insurance, and the initial escrow deposit. They also usually pay for their own inspections.
Sellers typically pay commissions and the costs of delivering clear title, such as paying off their mortgage and, in many areas, transfer taxes and the owner's title policy. Home warranties and HOA resale documents are often seller costs too. Local custom varies a lot, especially for transfer taxes, title insurance, and attorney or settlement fees, so the defaults here are starting points to edit.
Agent commissions after the 2024 rule changes
Since August 2024, buyer agent compensation is no longer offered through MLS listings, and buyers sign a written agreement with their agent before touring homes. Sellers can still agree to pay the buyer agent, or offer a credit the buyer uses toward it, but it is negotiated deal by deal.
If you are a buyer paying your own agent, switch that line to Buyer. If the seller agrees to cover it, leave it on Seller or model it as a seller credit.
How property tax proration works
Property taxes are split so each party pays for the days they own the home. In this calculator the seller owns the home through the day before closing and the buyer owns it from the closing date on.
If this year's taxes have not been billed yet, which is common where taxes are paid in arrears, the seller credits the buyer for the seller's share, and the buyer pays the whole bill later. If the seller already paid the year's taxes, the buyer reimburses the seller for the rest of the year. Many localities use fiscal years or bill in installments, so check your settlement agent's proration dates.
Seller credits and concessions
A seller credit, or concession, is money the seller gives the buyer at closing to cover costs. It lowers the buyer's cash to close and the seller's net proceeds by the same amount, and it can help a cash-tight buyer more than an equal price cut.
Loan programs cap seller credits, often at a few percent of the price depending on the loan type and down payment, and a credit cannot exceed the buyer's actual closing costs. Confirm the limit with your lender before building it into an offer.
FAQs
What closing costs does the seller pay?
Sellers usually pay agent commissions, their mortgage payoff, and in many areas transfer taxes and the owner's title insurance policy. Local custom and the purchase contract decide the details.
What closing costs does the buyer pay?
Buyers usually pay lender fees, appraisal, the lender's title policy, recording fees, inspections, and prepaids such as interest, insurance, and the initial escrow deposit.
Can the seller pay all of the buyer's closing costs?
Sometimes, through a seller credit, but loan programs cap the credit and it cannot exceed the buyer's actual costs. Your lender can tell you the limit for your loan.
Is earnest money a closing cost?
No. Earnest money is a deposit the buyer makes after the offer is accepted. At closing it is credited toward the buyer's down payment and closing costs, which is why it lowers cash to close.
How much are closing costs in total?
Buyers often pay roughly 2% to 5% of the price, and sellers more when they pay commissions, but it varies widely by state, loan type, and negotiation. Use your Loan Estimate and a seller net sheet for real numbers.
Run the numbers