Which closing costs are typically paid by the seller, and which by the buyer?

Which closing costs are typically paid by the seller, and which by the buyer?

• A. Seller: commissions, title policy, prorations; Buyer: loan origination, appraisal, credit report, recording fees
• B. Seller: loan origination; Buyer: commissions
• C. Seller: recording fees; Buyer: title policy
• D. Seller: HOA fees; Buyer: property taxes

Answer: (A)

In residential closings, closing costs are allocated based on who provides or benefits from each service. Costs tied to selling and transferring ownership are usually borne by the seller: commissions to the real estate agents, the owner’s title policy that protects the buyer and lender, and prorations for taxes or HOA dues that accrue up to the closing date. Costs tied to financing and recording the new ownership are usually borne by the buyer: loan origination fees charged by the lender, the appraisal fee to determine value, the credit report, and the recording fees to record the deed and mortgage with the county. This split reflects who benefits from or initiates each service, and aligns with common practice in many markets.

In residential closings, closing costs are allocated based on who provides or benefits from each service. Costs tied to selling and transferring ownership are usually borne by the seller: commissions to the real estate agents, the owner’s title policy that protects the buyer and lender, and prorations for taxes or HOA dues that accrue up to the closing date. Costs tied to financing and recording the new ownership are usually borne by the buyer: loan origination fees charged by the lender, the appraisal fee to determine value, the credit report, and the recording fees to record the deed and mortgage with the county. This split reflects who benefits from or initiates each service, and aligns with common practice in many markets.