What Are Closing Costs and Who Pays Them?

Closing costs are the fees and expenses associated with finalizing a real estate transaction. They can include title insurance, lender fees, appraisal, escrow services, and taxes. These typically range between 2–5% of the purchase price.

Both buyers and sellers have closing costs — buyers cover most lender-related fees, while sellers often pay agent commissions and title-related expenses. In some negotiations, the seller may agree to cover part of the buyer’s closing costs to make the deal work.

In my experience, understanding these costs upfront helps prevent surprises at the end. A good agent or lender should provide you with a detailed estimate early in the process.