Definition

Closing Costs

Closing costs are the transaction fees both sides pay to complete a sale — title and escrow fees, transfer taxes, recording fees, prorated property taxes, and lender charges on financed deals. Sellers typically pay 1–3% of the price, plus any agent commission.

Who pays what varies by state and contract. Sellers commonly cover the owner's title policy in some markets, documentary/transfer taxes (Florida's documentary stamps run $0.70 per $100 in most counties), and their share of prorations; buyers cover lender-related costs.

In direct cash sales, investors frequently pay most or all closing costs as part of the offer — worth confirming in writing, since 'we pay closing costs' is a real economic difference of thousands of dollars.

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