



Closing costs are the fees paid to third parties that help facilitate the sale of a home, and they vary widely by location. But as a rule, you can estimate that they typically total 2% to 7% of the home's purchase price. So on a $250,000 home, your closing costs would amount to anywhere from $5,000 to $17,500. Yep that's one heck of a wide range. More on that below.


How much are closing costs for buyers?


"If you're paying cash for a property, there are still a few closing costs, but they are significantly less," says Cara Ameer, a Realtor in Ponte Vedra, FL. Here are some of the fees home buyers should brace themselves to pay:

  • A fee for running your credit report.


How much are closing costs for sellers?

Here are the closing costs that sellers are typically responsible for:

  • Taxes on the home sale.
  • A fee for transferring the title to the new owner.



Why closing costs vary

The reason for the huge disparity in closing costs boils down to the fact that different states and municipalities have different legal requirements -- and fees -- for the sale of a home.

"If you live in a jurisdiction with high title insurance premiums and property transfer taxes, they can really add up," says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. "New York City, for instance, has something called a mansion tax, which adds a 1% tax to sales that exceed $1 million. And then there are the surprise expenses that can crop up like so-called 'flip taxes' that condos charge sellers."

To estimate your closing costs, plug your numbers into an online closing costs calculator, or ask your Realtor, lender, or mortgage broker for a more accurate estimate. Then, at least three days before closing, the lender is required by federal law to send buyers a closing disclosure that outlines those costs once again. (Meanwhile sellers should receive similar documents from their Realtor outlining their own costs.)

Word to the wise: "Before you close, make sure to review these documents to see if the numbers line up to what you were originally quoted," says Ameer. Errors can and do creep in, and since you're already ponying up so much cash, it pays, literally, to eyeball those numbers one last time before the big day.