If you are buying a house, you are probably wondering about buyer closing costs. The short answer is the buyer pays some, and the seller pays some. The better question is, what bills are you going to foot?

As a home buyer, your biggest expense is associated with your mortgage. However, you will not have to worry about commissions, because those are paid by the seller.

Buyer Closing Costs

For a typical transaction, the buyer’s fees will include a mortgage. For a seller, it will include a brokerage commission. These are the biggest expenses associated with property transactions. Beyond that You will have other expenses, and they can be broken down into recurring and non-recurring fees.

  • Recurring fees: One-time payments only at the closing
  • Non-recurring fees: will begin at the closing and continue at regular intervals

These may seem confusing, but they are important. You can break them into 3 groups. You will need inspections for the property and the title. There are payments to your attorney. Finally, there are fees associated with your loan.1

Buyer Closing Costs in Special Cases

There are special cases where typical costs aren’t included. In some cases, the buyer may pay cash. The seller may not pay commissions. In other cases, a third party, the seller’s lender, may have to approve the sale. These are common exceptions to the normal real estate transaction.

Sale By Owner

When you are selling a house by owner there are still fees involved. Both the buyer and seller still have expenses that must be paid. Even if there are no broker commissions.

  • Loan payoff
  • Transfer taxes and recording fees
  • Title insurance fees

In addition to these expenses, you will probably still want an attorney to review your contract and give you advice. therefore, you will have their bill as well. The biggest expense for a seller is usually the agent’s commission, but even if you sell by owner you will still have some.2

Cash Deal

The amount still depends on property value, but the good news is that the largest expense for a buyer is the loan. If you don’t have a loan you will pay significantly less.

  • Fixed costs include an appraisal, property inspection, survey, notary, and attorney fees
  • Other expenses depend on the value of the property, such as title insurance, escrows, and taxes

You will always have some, but the good news is that you won’t have bank fees for processing a loan.3

Short Sale

Short sale expenses involve the seller’s lender and the buyer, so, the seller does not have any. In addition, the buyer negotiates with the mortgage company for the price.

  • Buyers can always negotiate to have the seller’s bank reimburse them
  • The bank will issue a letter of acceptance for the contract and any buyer’s fees they will foot
  • Often a bank won’t decide about which they will handle until they issue a HUD-1 the day before closing

The negation for a house sale is very different in a short sale because it is only a business transaction to a bank. They are only trying to minimize their loss. Any movement on price or buyer’s expenses increases their loss. Therefore, they are usually unwilling to negotiate much.4


  1. The Motley Fool
  2. Realtor.com
  3. The Motley Fool
  4. SFGate