Who Pays Closing Costs? A State-by-State Breakdown
Closing costs are shared - but not evenly, and not the same way in every state. Here is what buyers almost always pay, what sellers typically pick up, and where local custom flips the biggest line item: owner's title insurance.
The 30-second summary
- Buyers typically pay lender fees, lender's title insurance, appraisal, inspection, recording fees, and prepaid escrow.
- Sellers typically pay real estate commissions and, in roughly half the country, the owner's title insurance policy.
- Transfer tax follows local custom and is often negotiable - some states have none at all.
- On a $400k / $320k loan purchase, title insurance alone is about $2,362 in Texas (seller pays most of it) vs $2,391 in New York (buyer pays all of it).
- Customs are not law - the purchase contract can shift almost any line item via seller concessions.
What buyers almost always pay
These line items land on the buyer in virtually every US market, regardless of state custom:
- Lender origination / underwriting fees
- Appraisal and credit report
- Home inspection (buyer's choice, but nearly universal)
- Lender's title insurance policy
- Recording fees for the mortgage
- Prepaid escrow (property tax, homeowners insurance, prepaid interest)
Together these usually make up most of the 2-5% buyer closing-cost load. Run the closing cost calculator for a state-specific estimate with every line item editable.
What sellers typically pay
- Real estate commissions (listing-side, and often buyer-broker compensation)
- Owner's title insurance - in seller-pay custom states
- Seller concessions negotiated into the contract
- Prorated property taxes and HOA dues through the closing date
- Home warranty (optional, often offered as a buyer sweetener)
Model the seller side with the seller's net sheet calculator.
Owner's title insurance: who pays by state
This is the biggest custom that actually flips by state. The lender's policy stays on the buyer; the owner's policy is the one that moves. Figures below are local custom, not legal requirements - confirm with the title company for the specific county.
| State | Owner's policy custom | Note |
|---|---|---|
| Texas | Seller | Strong statewide seller-pay custom |
| Florida | Varies by county | Seller in most counties; buyer in some SE counties |
| California | Varies by county | Flips by county - ask the title company |
| New York | Buyer | - |
| Illinois | Seller | - |
| Arizona | Seller | - |
| Pennsylvania | Buyer | - |
| New Jersey | Buyer | - |
| Georgia | Buyer | - |
| North Carolina | Buyer | - |
| Ohio | Seller | - |
| Colorado | Seller | - |
| Washington | Seller | - |
| Massachusetts | Buyer | - |
| Maryland | Buyer | - |
| Virginia | Seller | - |
| Michigan | Seller | - |
| West Virginia | Buyer | - |
Want the dollar amount, not just who pays? The title insurance calculator estimates owner's and lender's premiums for every state, using the official Texas and Florida schedules where rates are set by law.
Worked example: same house, two states
$400,000 purchase price, $320,000 loan (20% down). Title insurance only - from the calculator engine:
| Texas | New York | |
|---|---|---|
| Owner's premium | $2,262 | $1,915 |
| Lender's premium | $100 | $476 |
| Buyer pays (title) | $100 | $2,391 |
| Seller pays (title) | $2,262 | $0 |
Same house, same loan - nearly a $2,300 swing in who writes the title-insurance cheque, driven entirely by local custom. That is why "who pays closing costs" is a state question, not a national one.
Seller concessions
Even in a buyer-pay custom state, the seller can agree to cover some of the buyer's closing costs. Loan programs cap how much:
- Conventional: typically 3% (high LTV) to 9% (low LTV) of the purchase price
- FHA: up to 6%
- VA: up to 4%
Concessions are written into the purchase contract. They reduce the buyer's cash to close and reduce the seller's net - both calculators above will reflect that once you plug the concession amount in.
FAQ
Who pays closing costs - the buyer or the seller?
Both. Buyers typically pay lender fees, the lender's title policy, appraisal, inspection, recording fees, and prepaid escrow. Sellers typically pay commissions and, in many states, the owner's title insurance policy. Transfer tax follows local custom.
Who pays for title insurance?
Buyer pays the lender's policy almost everywhere. Owner's policy: seller-pay in Texas / Illinois / Arizona, buyer-pay in New York / New Jersey / Pennsylvania, county-by-county in California and parts of Florida.
Can the seller pay the buyer's closing costs?
Yes - seller concessions, capped by loan program (roughly 3-9% conventional, 6% FHA, 4% VA). Negotiated into the purchase contract.
How much do buyers pay in closing costs?
Roughly 2-5% of purchase price nationally, separate from the down payment. Use the closing cost calculator for a state-specific figure.
Are closing cost customs the same as law?
No. Customs are starting points for negotiation. The purchase agreement can shift almost any line item.
What closing costs does the seller always pay?
Nothing is absolute, but commissions are almost always seller-side in practice. Owner's title is seller-paid by custom in roughly half the country.
Do first-time buyers pay different closing costs?
Same fee schedule, but many state housing finance agencies offer closing-cost assistance for qualifying first-time buyers.
Where can I see the exact number before closing?
Loan Estimate (within 3 business days of application) and Closing Disclosure (at least 3 business days before closing). Those are the binding figures.
Run the numbers
Title insurance is the line item where state custom changes the buyer's cheque the most. Estimate both policies - and who pays - for your state, then fold it into a full closing-cost picture.
Related: Seller's net sheet · Property tax calculator · All US calculators.
Disclaimer: Closing-cost customs are local convention and negotiable - not law. Title insurance premiums for Texas and Florida use official promulgated schedules; other states are estimates. Confirm with your title company, lender, and Closing Disclosure. This is not financial or legal advice.