Who pays when selling a house?

2 hours ago

1 6 minutes read

Key Takeaways

The costs of selling a home are shared between the buyer and seller, but who pays what can vary based on the terms of the deal.
Many expenses, including real estate agent commissions, closing costs and concessions, are negotiable and can be structured in different ways.
Sellers often cover costs such as transfer taxes, title-related costs and agreed-upon repairs, while buyers typically pay for inspections, appraisals and loan-related costs.

Buying or selling a house is about more than agreeing on the price. From loan fees and title insurance to inspections and commissions, both parties share the financial responsibility of getting to the closing table. The exact division depends on regional customs, lender rules and how each party negotiates.

While many costs are typically handled in a certain way, almost all costs in a real estate transaction are negotiable and can vary from deal to deal. Understanding who typically pays for what can help you estimate your true costs and avoid last-minute surprises.

Who pays what in a real estate transaction?

Here’s a clear breakdown of who typically pays for the major expenses, and which expenses are negotiable. While some fees are standard, others may vary based on local customs or the strength of your negotiation.

Type of expenses	Paid by seller	Paid by buyer	Negotiable
Brokerage commissions	Sometimes	Sometimes	✅
Valuation fee		✅
Home inspection		✅
Escrow costs			✅
Title insurance	✅
Lender’s title insurance		✅
Registration and transfer tax	✅
Home warranty			✅
Land survey		✅
Real estate tax (pro rata)	✅	✅
Repairs or concessions			✅

In short: Knowing these costs early allows both parties to budget with confidence and avoid last-minute stress. With clear expectations, closing day becomes much smoother for everyone.

What costs do sellers pay when selling a house?

Now that you know how costs are generally broken down, let’s look at what sellers typically cover.

Sellers often absorb a significant portion of the closing costs because they walk away with the proceeds of the sale, but the exact breakdown depends on the negotiations, local customs and how the deal is structured.

Agent commissions may also be part of the seller’s costs, but this depends on how the fee is negotiated during the transaction. In some cases, buyers can pay their agent directly.

Common seller fees include:

Title insurance for the buyer: Protects the new homeowner from property disputes.
Transfer taxes: Usually paid by sellers and calculated as a small percentage of the sales price.
Deposit costs: Shared or fully covered by the seller depending on local usage.
Repairs and concessions: Sellers often pay for repairs negotiated after inspection.
Outstanding bills and homeowners’ association contributions: Prorated up to and including the closing date.

Pro tip: Ask your Redfin agent for one net sheet early in the process to estimate your returns.

Who pays the deposit costs?

Deposit Companies act as neutral third parties who hold funds and documents until the deal closes. Costs vary by state. In CaliforniaBuyers and sellers often split escrow costs while inside Washingtonthey are usually shared or allocated by local custom and negotiation.

Typical escrow fees range from 1-2% of the home price. In slower markets, sellers sometimes cover these costs to make their offer more attractive.

Who pays for the home inspection?

Normally the buyer pays the costs home inspection as part of their due diligence investigation. According to Rocket Mortgage, the average inspection costs $300-$500.

Some sellers order one pre-listing inspection to identify potential problems early – a proactive step that can avoid surprises during negotiations.

Who pays for the appraisal?

Lenders require one valuation to confirm the market value of the house before finalizing the loan. The buyer pays for the appraisal, usually between €400 and €700.

However, in competitive markets, sellers sometimes agree to cover these costs as part of a negotiated offer.

Who pays for title insurance?

Two policies exist:

Title insurance: Paid by the seller to protect the buyer.
Lender’s title insurance: Paid by the buyer to protect the lender’s interests.

Regional customs determines who pays for which policy. In some areas, sellers cover both; in other cases the costs are shared.

Who pays for a land survey?

A buyer usually pays for the land survey to confirm boundary lines. Costs range between $300 and $1,000 depending on lot size and location. Vendors occasionally conduct a preliminary investigation to address boundary issues early.

Who pays the transfer tax?

Transfer taxes (also called transfer taxes) are usually paid by the seller. These vary widely – from 0.1% to 2% of the sales price – depending on local legislation.

Check your state’s requirements via Redfin’s Home Selling Cost Guide.

Who pays for the home warranty?

Each party can pay for one home warrantywhich typically costs $400-$700 per year. Sellers often add one to attract buyers and reduce post-sale disputes over devices or systems.

Why would a seller pay closing costs?

Sellers sometimes pay a portion of the buyer’s closing costs, called concessions from the seller – to make the deal more attractive. This strategy works well in a buyer’s market or when a property has been on the market for a while.

Covering costs such as loan origination fees or prepaid taxes can help close deals faster, although this reduces the seller’s net proceeds.

Extensive breakdown: Who pays what when selling a house

Closing costs	Typical payer	Negotiable?	Details
Loan origination costs (0-1% of the loan amount)	Copper	❌	Fees charged by the lender for processing the loan.
Brokerage commissions	Varies	✅	Can be paid by the seller, buyer or split depending on the agreement.
Processing fee ($300-$900)	Copper	❌	Paid to the lender for preparing documents.
Insurance reimbursement ($300-$750)	Copper	❌	Covers the costs of evaluating loan risk.
Application fee ($200 – $500+)	Copper	❌	Costs charged by the lender for processing your mortgage application.
Credit Report Fee ($35)	Copper	❌	Covers the costs of preparing a credit report.
Appraisal fee for your home ($500 – $1,000+)	Copper	✅	Sometimes covered by the seller to sweeten an offer.
Home inspection fee ($300 – $500)	Copper	✅	Buyers usually pay; sellers can perform a preliminary inspection.
Title Search and Title Report ($300–$2,500+)	Split	✅	Confirms clear title; cost distribution depends on the region.
Lender’s title insurance ($300-$1,500+)	Copper	❌	Protects the interests of the lender.
Title insurance (optional)	Seller	✅	Protects the buyer; often paid by the seller.
Security Deposit Fees ($350–$1,000+)	Split	✅	Shared between buyer and seller in most states.
Withdrawal fee ($20 – $250)	Copper	❌	Covers local registration of the deed and mortgage.
Prepaid taxes and insurance ($1,000–$4,500+)	Copper	❌	Advance required for lender escrow accounts.
Prepaid interest (varies)	Copper	❌	Covers interest from closing to first mortgage payment.
Mortgage or discount points (0-1% of the loan)	Copper	✅	Optional: lowers the loan interest rate.
Private Mortgage Insurance (PMI)	Copper	❌	Required with less than 20% down on conventional loans.
Real estate attorney fees ($400+)	Copper	✅	Required in some states; can be shared in consultation.
HOA costs (varies)	Copper	✅	Often prepaid; conditions depend on HOA rules.
HOA transfer fees (varies)	Seller	✅	Paid to update association ownership information.
Survey Cost ($400+)	Copper	✅	Confirms property boundaries; may be required by the lender.
Flood Certification ($20)	Copper	❌	Determines if flood insurance is required.
Notary fees ($100)	Copper	❌	Pays for notarizing closing documents.
Closing Letter of Protection (CPL) Fee ($50)	Copper	❌	Provides legal protection for escrow transactions.
Document Preparation Fee ($50)	Copper	❌	Includes preparation of final loan paperwork.

Frequently asked questions: Who pays for what during a house sale?

Can Buyers Negotiate for Sellers to Cover Closing Costs?
Yes. In one buyer’s marketsellers often offer concessions to help with upfront costs.
Can a seller refuse to pay certain costs?
Yes, although some necessary costs, such as transfer taxes or government levies, may be more difficult to avoid. However, agent commissions are completely negotiable and can be structured in a variety of ways.
Are sales costs tax deductible?
Some expenses – such as real estate agent commissions and home improvements made before the sale – can reduce taxable gain. Contact a qualified tax professional for more information.

Take the next step toward selling your home

While commissions are negotiable and can be structured in different ways depending on the deal, sellers typically cover title and transfer taxes, and buyers handle inspections, appraisals and loan fees. Local customs and negotiations will ultimately determine your specific situation.

Ready to take the next step? Connect to one Redfin agent near you to get a personalized estimate of your cost of sales and discover how to maximize your net revenue.