Understanding Closing Costs: Who Pays What

When buying or selling a home, the listing price is only part of the financial picture. Closing costs—the fees and expenses required to finalize a transaction—can add a significant amount. In 2025, as home values and fees change, it’s more important than ever to understand who pays what, how much to expect, and where you might save. If you’d like help estimating your closing costs, reach out via our Contact Page.

What Are Closing Costs?

Closing costs are all the fees, taxes, and charges involved in finalizing a real estate transaction. They include things like:

• Loan origination fees

• Appraisal fees

• Title search & insurance

• Escrow / settlement fees

• Recording fees and transfer taxes

• Prepaid items (insurance, taxes)

• Inspection fees, etc.

According to Zillow, homebuyers in 2025 can typically expect closing costs amounting to 2% to 5% of the home’s purchase price. Zillow

How Much Are Closing Costs in 2025?

A recent report from LodeStar shows that the national average total closing cost for purchase mortgages is $4,661. lodestarss.com

Bankrate data supports this, showing that closing costs often range between less than 1% up to nearly 3%, depending heavily on state and local factors. Bankrate

For example, in Florida, closing costs tend to fall somewhere in the ballpark of 1.5% to 2.5% depending on county, taxes, and fees.

So if you’re buying a $300,000 house, your closing costs might run between $6,000 and $15,000 depending on your area and loan structure. The Mortgage Reports+1

Who Pays the Closing Costs?

It depends on the terms of your agreement and local customs, but generally:

Party	Common Costs They Pay
Buyer	Lender fees, appraisal, inspection, part of title insurance, prepaids (insurance / taxes), recording & transfer fees
Seller	Real estate agent commissions, title / transfer taxes, seller’s attorney (if applicable), some prorated taxes, any credits agreed to buyer
Negotiated / Split	Some costs (e.g. escrow fee, title search) might be shared or negotiated in the sale contract

Because some costs are negotiable, buyers sometimes ask sellers to contribute toward closing costs to reduce their upfront cash needs. Always check the contract terms.

Tips to Reduce or Control Closing Costs

1. Shop multiple lenders — origination and underwriting fees can vary a lot.

2. Ask sellers to pay toward closing costs — especially in a buyer’s market.

3. Roll eligible costs into the loan — some fees can be financed, but you’ll pay interest on them.

4. Choose waived or lower-cost options — in some markets, title or escrow providers offer cheaper alternatives.

5. Know local tax & transfer fee structure — since these are often less negotiable, understanding your county’s rules helps.

6. Avoid unnecessary add-ons — such as optional inspections or unneeded services.

   
   

Closing costs are a major component of buying or selling a home. Being prepared for them—and knowing who pays what—can prevent unpleasant surprises. If you want a personalized estimate for your specific property and location, just reach out through our Contact Page. We're happy to walk you through expected costs.