The Surprising Truth About Closing Costs (and Your Bottom Line)

When most homeowners think about selling, they focus on one number: the sale price. But here’s a truth every seller should know, what your home sells for isn’t the same as what you take home.

Between taxes, fees, commissions, and a few line items you might not expect, closing costs can make a noticeable dent in your net proceeds. The good news? Most seller expenses are predictable, and with a little planning, there shouldn’t be any surprises when you reach the settlement table.

Let’s break down what sellers in today’s market need to know about closing costs, how they vary by situation, and what’s actually negotiable.

What Are Closing Costs?

“Closing costs” are the collection of fees and payments that finalize the sale of your home. They cover everything from the title transfer and taxes to the services of agents, attorneys, and settlement companies who make sure your sale is legally binding and fully recorded.

For most sellers, these costs total anywhere from 5 – 8% of the sale price, though that number includes commissions, which make up the largest portion.

Typical Closing Costs for Sellers

Here’s what’s typically deducted from your proceeds at closing:

• Real Estate Commissions

  • This is almost always the biggest expense, often split between the listing and buyer’s agents. While commission structures vary, they’re usually a percentage of the sale price agreed upon when you signed your listing agreement.

• Transfer Taxes

  • Pennsylvania sellers are well aware of this one, the realty transfer tax is typically 2% of the sale price, split evenly between buyer and seller (1% each). Some municipalities add an additional local transfer tax, so your share might vary slightly depending on where your property is located.

• Title Company Fees

  • Even though buyers pay most title-related costs, sellers often share in certain administrative fees. Common ones include:

    • Document preparation or deed recording fees

    • Conveyancing charges

    • Payoff verification and wire transfer fees

  • These usually aren’t major individually, but together they can add up to several hundred dollars.

• Prorated Property Taxes and HOA Fees

  • If you’ve prepaid property taxes or HOA dues, you’ll receive a credit for the unused portion. On the flip side, if you owe taxes up to the settlement date, that amount will be deducted from your proceeds.

• Repairs or Credits from Negotiations

  • If the home inspection led to repair credits, these amounts are reflected at closing. Similarly, if you agreed to a seller assist toward the buyer’s closing costs, that figure is deducted here.

• Mortgage Payoff

  • If you still have a loan balance, the title company will pay it off directly from the closing proceeds. Be aware of any prepayment penalties, rare, but worth checking.

    
    

Costs That Are Sometimes Negotiable

Not every line item is fixed. Depending on the market, some closing costs can be adjusted to make the deal work:

• Seller Assist: In a buyer’s market, sellers often agree to cover part of the buyer’s closing costs to make their home more attractive. In a seller’s market, that’s less common but can still be a smart move to secure a strong offer.

• Home Warranties: Occasionally, sellers offer a one-year home warranty to reassure buyers, especially if the home’s mechanical systems are older.

• Settlement Fees: Depending on the title company, you may be able to negotiate or shop for lower administrative costs.

Pro Tip: Ask your Realtor for a seller’s net sheet before listing. It estimates your likely closing costs and helps you plan for what you’ll actually walk away with after settlement.

How the Market Impacts Seller Costs

The type of market you’re in makes a big difference in what you might end up paying:

• In a Seller’s Market

  • You hold the leverage. Buyers are competing for homes, so they’re less likely to ask for closing cost help or big inspection credits. You can typically expect fewer concessions and a cleaner contract.

• In a Buyer’s Market

  • Buyers have the advantage, and you may need to offer incentives to make your home stand out. Covering part of their costs, including a few thousand in seller assist or small repair credits, can make your home more appealing without cutting the sale price drastically.

The Bottom Line

When it comes to closing costs, the key isn’t avoiding them, it’s understanding them.

A good Realtor will walk you through an estimated net sheet before you ever accept an offer, help you identify what’s negotiable, and make sure there are no surprises at settlement.

Remember: closing costs are just part of doing business, and when managed well, they don’t have to take you by surprise. What matters most is your net and your ability to move confidently into your next chapter.  Have questions?           ClickHERE to connect!