Who Pays Closing Costs?

Introduction

Who pays closing costs is negotiable. Buyers typically pay most costs—lender fees, appraisal, title, etc. Sellers may pay some costs (e.g., transfer taxes, owner's title in some states) or contribute via seller concessions. See Seller Paid Closing Costs Explained and What Are Closing Costs.

Frequently Asked Questions

Who typically pays closing costs?

Buyers usually pay most closing costs—lender fees, appraisal, title, etc. Sellers may pay some costs (e.g., transfer taxes, owner's title policy in some states) or contribute via seller concessions.

What are seller concessions?

Seller concessions are when the seller agrees to pay a portion of the buyer's closing costs. Limits apply based on loan type and down payment (e.g., FHA typically allows up to 6% of the sale price).

Can the seller pay all closing costs?

No. Concession limits cap how much the seller can contribute. Excess seller credits may need to be applied to the purchase price or other allowed uses.

How much can the seller contribute?

Conventional loans typically limit seller contributions to 3%–9% depending on down payment. FHA allows up to 6%. VA may allow more. Check your loan program.