When buying or selling a home in 2025, remember to consider more than just the price. Closing costs are fees you need to pay at the end of the real estate transaction. It’s important to budget for these costs.
Whether you’re a first-time buyer or a seasoned seller, knowing about closing costs ahead of time helps you avoid surprises and plan your finances better.
Closing Costs for Buyers
For buyers, closing costs typically range between 2% and 5% of the purchase price. These costs may include:
- Loan Origination Fees – Charged by your lender to process your mortgage.
- Appraisal Fee – Ensures the property’s value matches the purchase price.
- Credit Report Fee – Covers the cost of your credit check.
- Title Search & Title Insurance – Protects against title disputes.
- Home Inspection Fee – Provides peace of mind before purchase.
- Escrow Fees – Paid to the escrow company overseeing the transfer.
- Prepaid Property Taxes & Homeowners Insurance – Collected upfront for your escrow account.
- Recording Fees – Charged by the county for legal documentation.
Tip for Buyers: Always review your Loan Estimate from the lender, as it outlines your expected buyer closing costs, so you can plan.
Closing Costs for Sellers
Sellers face their own set of fees, which typically fall between 8% and 10% of the home’s sale price (largely due to commissions). Common seller closing costs include:
- Real Estate Agent Commissions – Usually 5%–6%, split between buyer’s and seller’s agents.
- Title Insurance (for the Buyer) – Often paid by the seller, depending on local custom.
- Escrow Fees – Shared with the buyer.
- Outstanding Taxes or HOA Fees – Must be settled before closing.
- Repairs or Credits – Negotiated during inspection.
- Attorney Fees – Required in some states.
Tip for Sellers: Ask your agent for a net sheet. It gives a clear estimate of your proceeds after seller closing costs are deducted.
Average Closing Costs Breakdown
Buyers: 2%–5% of purchase price
Sellers: 6%–10% of the sale price
Example: On a $500,000 home:
Buyers may spend $10,000–$25,000.
Sellers may spend $30,000–$50,000.
You can use this calculator to estimate your closing cost.
Is it possible to negotiate closing costs?
Many closing costs are negotiable. You should discuss fees like origination fees with your lender and compare prices for services such as title insurance and home appraisals. Sellers can also help by covering some costs through “seller concessions.” However, government fees, property taxes, and insurance premiums typically cannot be negotiated.
When do I pay closing costs?
You pay closing costs at the end of the home-buying process, on the day you finalise the purchase. Typically, you will bring a cashier’s check or arrange a wire transfer for these costs.
Closing costs can feel complicated, but when explained clearly, they’re simply part of the home-buying or selling journey. By understanding real estate closing costs in 2025, both buyers and sellers can budget effectively and move forward with confidence.
Thinking about buying or selling a home in Sonoma County? We’d be happy to walk you through the costs and help you prepare for a smooth closing. Call us today!
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