Most homeowners spend a lot of time thinking about what their home will sell for. What they spend far less time thinking about is how much of that number they will actually walk away with. Closing costs have a way of catching sellers off guard, and by the time they show up on the settlement statement, there is not much you can do about them.
If you are getting ready to sell your home and want to know exactly what to expect, this guide breaks down what closing costs are, who pays them, how much they typically run, and what options you have if you would rather avoid them altogether.
What Are Closing Costs When Selling a House?
Closing costs are the fees and expenses that get paid at the end of a real estate transaction, right before ownership officially transfers from seller to buyer. They are separate from the sale price of the home, and they come out of your proceeds at the closing table.
Some of these costs go to the title company handling the transaction. Some go to the county or state in the form of transfer taxes. Others go to real estate agents, attorneys, or lenders involved in the deal. The exact breakdown varies depending on where you live, how the sale is structured, and what gets negotiated between buyer and seller.
A lot of sellers assume closing costs are primarily the buyer’s problem. The reality is that sellers typically pay a significant portion of them, and in many cases more than the buyer does. Understanding what you are responsible for before you list your home can save you from a very unpleasant surprise on closing day.
Who Pays Closing Costs When Selling a House?
Both the buyer and the seller pay closing costs, but they cover different things. As a seller, your share of closing costs generally includes the largest single expense in the entire transaction: real estate agent commissions.
Here is a breakdown of what sellers are typically responsible for:
Real estate agent commissions are the biggest line item for most sellers. The standard commission is around 5 to 6 percent of the sale price, split between the buyer’s agent and the seller’s agent. On a $300,000 home, that is $15,000 to $18,000 coming straight out of your proceeds.
Transfer taxes are charged by the state, county, or municipality when a property changes hands. In Illinois, sellers are responsible for the state transfer tax as well as any local transfer taxes, which can vary significantly depending on the city. Chicago, for example, has its own transfer tax on top of the state rate, which adds up quickly on higher-priced properties.
Title insurance protects the buyer and their lender against any issues with the property’s title history. Sellers often pay for the owner’s title insurance policy as part of the transaction, though this is sometimes negotiable.
Attorney fees are common in Illinois real estate transactions. While not legally required, having an attorney review contracts and represent your interests at closing is standard practice, and that comes with a fee.
Outstanding property taxes are typically prorated at closing. If you have not paid your property taxes for the portion of the year you owned the home, that amount gets settled out of your proceeds before you walk away.
Home warranty is sometimes offered by sellers as a way to attract buyers or satisfy a negotiation request. If you agree to provide one, that cost comes out of your side of the transaction.
Buyers typically cover things like their lender fees, their portion of title insurance, and prepaid expenses like homeowners insurance and mortgage interest. But do not be surprised if a buyer negotiates for you to cover some of their closing costs as part of the deal, especially in a softer market.
How Much Are Closing Costs When Selling a House?
The total closing costs for a seller typically run between 8 and 10 percent of the sale price when you include agent commissions. Strip out the commissions and focus only on the other fees, and you are generally looking at 2 to 4 percent on top of that.
To put some real numbers on it, here is what a seller might pay on a $250,000 home in the Chicago area:
Real estate commissions at 5 to 6 percent would run $12,500 to $15,000. Transfer taxes at the state level plus Chicago’s local transfer tax could add another $1,500 to $3,000 depending on location. Title insurance, attorney fees, and prorated taxes might add another $2,000 to $4,000. All in, a seller on a $250,000 home could easily see $16,000 to $22,000 come out of their proceeds at closing before they ever cash their check.
That is a significant number, and it is one that a lot of sellers are not fully prepared for when they first start thinking about listing their home.
Can You Negotiate Closing Costs?
Some closing costs are fixed, like transfer taxes, which are set by the state and local governments and are not negotiable. Others have more flexibility. Agent commissions, while often presented as standard, can sometimes be negotiated depending on the market and the agent. Title insurance rates can vary between providers. Attorney fees differ from one firm to the next.
Sellers can also negotiate with buyers over who covers what. In a strong seller’s market where multiple offers are coming in, buyers are less likely to ask sellers to cover their closing costs. In a slower market, buyers sometimes request seller concessions as a condition of their offer, which means you end up paying a portion of their costs on top of your own.
The bottom line is that some savings are possible if you shop around and negotiate, but you are unlikely to eliminate closing costs entirely through negotiation alone. The commissions alone are enough to take a serious bite out of your proceeds no matter how the rest of the numbers shake out.
What Costs Come Out of Your Proceeds Without Being Called Closing Costs?
This is worth its own section because a lot of sellers focus entirely on closing costs and miss the other expenses that quietly reduce what they walk away with.
Repair costs and concessions are one of the biggest surprises in a traditional sale. After the buyer’s inspection, it is very common for them to come back requesting repairs or a credit to cover the cost of addressing issues they found. Even on homes that seem to be in decent shape, inspections almost always turn up something. Sellers who want to keep the deal together often end up agreeing to credits that can run anywhere from a few hundred to several thousand dollars.
Carrying costs are the ongoing expenses of owning a home while it sits on the market. Mortgage payments, property taxes, utilities, insurance, and maintenance do not stop just because you have listed the house. In a market where it takes two to three months to find a buyer and another 45 to 60 days to close, you could be looking at four to five months of carrying costs stacked on top of everything else.
Staging and prep costs are what many sellers spend getting their home ready for the market. Professional photography, cleaning, landscaping, and cosmetic updates all cost money before you ever receive a single offer.
When you add all of this up alongside traditional closing costs, the gap between your sale price and what actually lands in your bank account can be jarring.
How to Avoid Paying Closing Costs When Selling a House
The most straightforward way to avoid or significantly reduce closing costs as a seller is to sell directly to a local cash home buyer rather than listing on the open market.
Here is why that changes the equation so dramatically.
When you sell to a cash buyer like Big Door Home Buyers, there are no real estate agents involved on either side of the transaction. That means no commissions, which alone saves most sellers between $12,000 and $20,000 depending on the price of their home. Cash buyers also typically cover closing costs as part of the deal, so the expenses that would normally come out of your proceeds either disappear or are absorbed by the buyer.
There are no inspection contingencies, which means no repair requests and no credits being negotiated after the fact. There are no financing contingencies, which means the deal does not fall apart at the last minute because a buyer’s lender changed their mind. And because cash sales close much faster than traditional transactions, the carrying costs that pile up during a long listing period are dramatically reduced or eliminated entirely.
What you are left with is a much cleaner transaction where the number you agree on is far closer to the number you actually receive. For sellers who have been doing the math and feeling frustrated by how much a traditional sale takes out of their pocket, that simplicity is genuinely valuable.
It is worth noting that cash offers are typically below what a fully renovated home might fetch on the open market. But once you subtract commissions, repair credits, closing costs, and months of carrying expenses from a traditional sale, the real difference in what you walk away with is often much smaller than it first appears. For many sellers, especially those dealing with a home that needs work, an inherited property, or a situation that requires a fast and certain close, a cash sale simply makes more financial sense.
Final Thoughts
Closing costs are one of the least glamorous parts of selling a home, but they are one of the most important things to understand before you commit to a path. The difference between what your home sells for and what you actually walk away with can be substantial, and a lot of that gap comes down to costs that are easy to overlook when you are focused on the listing price.
If you are weighing your options and want to know what your home could sell for without the commissions, repair negotiations, and closing cost surprises that come with a traditional sale, reaching out to a local cash buyer for a no-obligation offer is a smart first step. You might find that the simpler path is also the smarter one.