Closing costs for sellers: what you pay when selling a house
What sellers pay at closing: agent commissions (negotiable since the 2024 NAR settlement), transfer taxes, title and escrow, prorated taxes, payoff, and the tax exclusion on your gain.
The short answer
Sellers typically pay the listing broker's commission, any buyer-broker fee or other concessions they agree to, state and local transfer taxes, their share of title and escrow fees, prorated property taxes and HOA dues, and the payoff of their mortgage (which isn't a cost but comes out of the proceeds). Since Aug. 17, 2024, commissions must be set in written agreements and remain fully negotiable (NAR). In California, the county transfer tax is $1.10 per $1,000 of value, and some cities add more.
Key numbers
- Commissions
- Negotiable; written agreements since Aug. 17, 2024
- CA county transfer tax
- $1.10 per $1,000
- Tax-free gain on a main home
- Up to $250,000 ($500,000 married filing jointly)
- Mortgage payoff
- Paid from proceeds
What sellers pay at closing
| Cost | Who sets it | Notes |
|---|---|---|
| Listing broker commission | Your listing agreement | Fully negotiable; must be in writing (NAR settlement, effective Aug. 17, 2024) |
| Buyer-broker fee or concessions | Your negotiation with the buyer | Optional. Sellers can offer concessions toward a buyer's costs, including buyer-broker fees, but offers of broker pay can't be posted on the MLS |
| Transfer taxes | State, county and city law | California counties charge $1.10 per $1,000 (Revenue and Taxation Code 11911); many cities add their own tax, and who pays is set by local custom and the contract |
| Title insurance and escrow or settlement fees | Local custom and the contract | Who pays the owner's title policy varies by region; ask for a written estimate |
| Prorated property taxes and HOA dues | Closing date | You pay your share up to the closing day |
| Mortgage payoff and any liens | Your lender | Includes interest through the payoff date; not a fee, but it reduces your cash |
| Repairs or credits | Inspection negotiations | Often negotiated as a credit to the buyer |
Worked example (hypothetical)
A $750,000 sale in a California city with no city transfer tax, with the seller paying 2.5% to the listing broker and offering a 2.5% concession toward the buyer's costs (both negotiable): commissions and concession $37,500, county transfer tax $825 ($750,000 × $1.10 per $1,000), plus title, escrow, prorations and any repair credits from your local estimate. Ask your agent and escrow company for a net-sheet before you list.
How to lower your selling costs
- Negotiate the listing commission and decide in advance whether you'll offer buyer concessions.
- Get title and escrow quotes; in many areas you can choose the provider.
- Time the closing to limit extra mortgage interest and prorated charges.
- Consider a seller-paid 2-1 buydown instead of a larger price cut if buyers are payment-sensitive.
Taxes on the sale
If you owned and lived in the home for at least 2 of the 5 years before the sale, you can exclude up to $250,000 of gain from income, or $500,000 if married filing jointly (IRS Publication 523). Selling expenses such as commissions and legal fees reduce your amount realized, which lowers the taxable gain. For what buyers pay, see mortgage closing costs explained.
Frequently asked questions
What closing costs does the seller pay?
Usually the listing broker's commission, any concessions or buyer-broker fee they agree to, transfer taxes where the seller customarily pays, their share of title and escrow fees, and prorated property taxes and HOA dues. The mortgage payoff also comes out of the proceeds.
Do sellers still pay the buyer's agent in 2026?
Only if they agree to. Since Aug. 17, 2024, buyer agents need a written agreement with the buyer, and sellers can choose to offer concessions toward the buyer's costs, including broker fees. All commissions are negotiable.
What is the transfer tax in California?
Counties charge $1.10 per $1,000 of value under Revenue and Taxation Code 11911. Many cities, including Los Angeles, add their own transfer tax on top.
Are seller closing costs tax deductible?
They aren't deducted like an expense, but selling expenses such as commissions reduce your amount realized, which lowers your taxable gain (IRS Publication 523).
Do I pay tax when I sell my house?
Not on the first $250,000 of gain ($500,000 married filing jointly) if you owned and lived in the home for at least 2 of the last 5 years (IRS Publication 523).