Can the seller pay the buyer's closing costs?

Yes — this is called a seller concession. Sellers can agree to pay some or all of the buyer's closing costs as part of the purchase negotiation. Lenders cap seller concessions at 2%–9% depending on loan type and down payment. Seller concessions are common when buyers have limited cash or in markets where sellers need to offer incentives. The concession reduces the seller's net proceeds rather than coming out of pocket separately.

What closing costs are negotiable?

Many closing costs are negotiable: agent commissions (most negotiable), lender origination fees, title insurance (shop around), attorney fees, and inspection fees. Some costs are fixed by third parties or government — transfer taxes, recording fees, and prepaid property taxes are generally non-negotiable. Ask your lender for a Loan Estimate on day one, which itemises every charge and lets you compare lenders.

Can closing costs be rolled into the mortgage?

Buyers can roll closing costs into the mortgage in two ways: a no-closing-cost loan (lender covers costs in exchange for a higher interest rate) or adding costs to the loan balance when refinancing. On a purchase, most lenders don't allow rolling closing costs into the loan amount directly — you typically need to bring them to the closing table. However, seller concessions can effectively achieve the same result by inflating the purchase price.

Who Pays Closing Costs — Buyer or Seller? (2026 Guide)

Q: Who pays closing costs — buyer or seller?

Both buyer and seller pay closing costs, but different ones. Buyers typically pay 2%–5% of the loan amount in closing costs — covering lender fees, title insurance, prepaid interest, and escrow setup. Sellers typically pay 1%–3% of the sale price in closing costs (title fees, transfer taxes, attorney fees) plus agent commissions. Total combined closing costs on a typical home sale run 5%–9% of the purchase price.

Both buyers and sellers pay closing costs — but they pay different things. Buyers typically pay 2%–5% of the loan amount; sellers typically pay 1%–3% of the sale price plus agent commissions. On a $350,000 home, total combined closing costs often run $25,000–$40,000. Here’s exactly who pays what.

Buyer Closing Costs — Full Breakdown

Buyers pay most of the lender-related fees plus their share of title and prepaid costs.

Cost Item	Who Pays	Typical Amount
Loan origination fee	Buyer	0.5%–1% of loan
Appraisal fee	Buyer	$400–$700
Credit report fee	Buyer	$30–$75
Title search	Buyer	$200–$500
Title insurance (lender’s policy)	Buyer	0.5%–1% of loan
Title insurance (owner’s policy)	Buyer (varies by state)	0.5%–1% of price
Home inspection	Buyer	$300–$600
Survey fee	Buyer (sometimes)	$300–$700
Prepaid homeowners insurance	Buyer	$800–$2,000/year
Prepaid property taxes (escrow)	Buyer	2–6 months of taxes
Prepaid mortgage interest	Buyer	Days remaining in month
Recording fees	Buyer	$25–$250
HOA transfer fee	Buyer (sometimes)	$200–$500

Total buyer closing costs: typically 2%–5% of the loan amount

Buyer Closing Cost Example — $350,000 purchase, $280,000 loan

Item	Amount
Loan origination fee (1%)	$2,800
Appraisal	$550
Title insurance (lender)	$1,400
Title insurance (owner)	$1,500
Home inspection	$450
Prepaid homeowners insurance	$1,200
Prepaid property taxes (3 mo.)	$1,875
Prepaid interest (15 days)	$450
Miscellaneous fees	$675
Total buyer costs	~$10,900 (3.1% of loan)

Seller Closing Costs — Full Breakdown

Sellers pay primarily agent commissions plus their share of transfer costs.

Cost Item	Who Pays	Typical Amount
Listing agent commission	Seller	2%–3% of sale price
Buyer agent compensation (if offered)	Seller (voluntary)	2%–2.5% of sale price
Title insurance (owner’s policy)	Seller (varies by state)	0.5%–1% of price
Transfer taxes / deed stamps	Seller (most states)	0.1%–2% of price
Attorney fees	Seller (some states)	$500–$1,500
Home warranty (if offered)	Seller (optional)	$300–$600
Prorated property taxes	Seller	Depends on closing date
Outstanding liens/HOA fees	Seller	Varies
Mortgage payoff	Seller	Outstanding balance

Total seller closing costs (excluding commission): typically 1%–3% of sale price

Seller Closing Cost Example — $400,000 sale

Item	Amount
Listing agent (2.5%)	$10,000
Buyer agent (2.5%)	$10,000
Transfer taxes (1%)	$4,000
Title insurance (seller)	$1,500
Attorney fee	$750
Prorated taxes	$1,200
Home warranty	$450
Total seller costs	~$27,900 (7% of price)

Which Costs Are Negotiable?

Cost	Negotiable?
Agent commission	✅ Most negotiable — set by contract
Lender origination fee	✅ Yes — compare lenders
Title insurance	✅ Shop around; rates vary by provider
Seller concessions (seller pays buyer’s costs)	✅ Yes — part of offer negotiation
Transfer taxes	❌ Set by state/local law
Recording fees	❌ Government fee
Prepaid property taxes	❌ Fixed by assessed value and closing date

Who Pays What by State

Customs vary significantly by state. In some states, the seller traditionally pays the owner’s title insurance policy; in others, the buyer does. Similarly, attorney requirements differ:

State	Transfer Tax Payer	Title Insurance Custom
California	Seller (county)	Seller pays owner’s title
Texas	No state transfer tax	Buyer pays owner’s title
New York	Seller + buyer (mansion tax)	Negotiable
Florida	Seller	Varies by county
Pennsylvania	Split 50/50	Buyer pays owner’s title

Your real estate agent or title company will provide a settlement statement estimate before closing showing exactly who pays what.

Seller Concessions — When the Seller Pays the Buyer’s Costs

A seller concession means the seller agrees to cover some or all of the buyer’s closing costs, reducing the seller’s net proceeds.

When this makes sense:

Buyer has limited cash reserves
Market is slow; seller needs to attract buyers
Price negotiation: inflate price by concession amount so seller nets the same

Lender limits on seller concessions:

Loan Type	Max Seller Concession
Conventional (< 10% down)	3%
Conventional (10%–24% down)	6%
Conventional (25%+ down)	9%
FHA loan	6%
VA loan	4%

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

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