Who pays closing costs, the buyer or the seller?

Both. The buyer pays 2 to 5 percent of the loan amount; the seller pays 8 to 10 percent of the price, mostly agent commission. The seller can also contribute toward the buyer's costs within Fannie Mae caps.

Can closing costs be negotiated?

Yes. Commission, transfer-tax splits, title services, repairs, and seller concessions are all negotiable in the purchase contract, even where local custom assigns them.

Do sellers pay transfer tax?

In about 89 percent of transactions the seller pays it (Clever research), but it is negotiable, and in split-custom states like Pennsylvania and Delaware the contract sets the split.

What is the Closing Disclosure?

The CFPB's standardized five-page form, delivered at least three business days before closing, itemizing every charge both sides pay. Compare it against the Loan Estimate and challenge anything that moved.

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The Ledger · Closing costs

Who Pays Closing Costs: Buyer vs Seller

The buyer pays 2 to 5 percent; the seller pays 8 to 10 percent; and the seller can legally cover part of the buyer’s bill up to Fannie Mae’s caps. The full split, the negotiable middle, and the paper trail that protects both sides.

Filed October 21, 2026 · figures checked against 2026 sources

The short answer

Both sides pay, but they pay different bills. The buyer pays 2 to 5 percent of the loan amount in closing costs (LendingTree 2026). The seller pays 8 to 10 percent of the sale price — about $40,000 to $50,000 on a $500,000 home — and most of that is agent commission, not fees (Mortgage-Info's 2026 seller breakdown). On top of that, the seller can contribute directly toward the buyer's closing costs, within caps set by Fannie Mae: 3 percent of the price when the buyer puts less than 10 percent down, 6 percent with 10 to 25 percent down, and 9 percent above 25 percent down.

$12,000

The most a seller can contribute toward a buyer's closing costs on a $400,000 home with 5% down — the 3% Fannie Mae cap for loans over 90% LTV.

The buyer's bill: 2 to 5 percent

The buyer's closing costs are the lender's charges, the title and settlement lines, the buyer's share of transfer taxes, and the prepaids and escrow — the $13,906 on the $450,000 worked example. The buyer always pays these unless the seller agrees to cover part of them. What the buyer cannot do is skip them: the lender requires every line settled before funding, which is why "cash to close" is the number that ends deals when buyers budget only for the down payment.

The seller's bill: 8 to 10 percent

The seller's side is a different animal. Mortgage-Info's 2026 breakdown of a $500,000 sale:

Seller line	Typical cost
Agent commission	$25,000–$30,000 (5–6%)
Transfer / excise tax	$500–$10,000 (state-dependent)
Title fees	$2,000–$3,500
Attorney fees	$500–$1,500
Repairs / credits	$2,000–$5,000
Recording, HOA transfer, misc	$1,000–$2,000
Total	$40,000–$50,000

Two notes on that table. First, commission is the whole story: after the 2024 NAR settlement, commission is fully negotiable, and discount and flat-fee brokers can save a seller $5,000 to $15,000 on this price. Second, the seller's transfer-tax share is where the state tables bite hardest — a Delaware seller's transfer tax dwarfs an Oregon seller's, which is part of why the same-priced sale nets such different proceeds in different states.

Seller concessions: the buyer's discount, with a ceiling

In a buyer's market, sellers routinely offer to pay part of the buyer's closing costs — called seller concessions or interested-party contributions. Fannie Mae caps them by loan-to-value (per AmeriSave's 2026 guide to the Fannie Mae guidelines):

Down payment	Loan-to-value	Max seller contribution
Under 10%	Over 90%	3% of price
10–25%	75–90%	6% of price
Over 25%	Under 75%	9% of price
Investment property (any down payment)		2% of price

The worked example makes it concrete: buying a $400,000 home with 5 percent down puts the loan at 95 percent LTV, so the seller can contribute up to $12,000 (3 percent) toward the buyer's costs. If the buyer's actual closing costs are $10,000, the seller can cover all of them; at $14,000, the seller covers $12,000 and the buyer brings the remaining $2,000. Anything above the cap is a gift the lender will not allow — the contribution is capped, not the negotiation, so price and concessions trade off against each other.

The negotiable middle

Almost everything about who pays is negotiable in the purchase contract, even where custom says otherwise. Clever's transfer-tax research found the seller pays in 89 percent of transactions — but the contract can specify any split, and in a buyer's market sellers agree to cover the buyer's side. The negotiable lines, in rough order of savings:

Seller concessions up to the Fannie Mae caps — the single biggest lever, worth up to $12,000 on the $400,000 example.
Transfer-tax split in split-custom states (Pennsylvania, Delaware, Connecticut) — custom is negotiable.
Title services — the buyer can shop their own, and the fee is marked shoppable on the Loan Estimate.
Repairs and credits — inspection findings convert into seller credits at the table.
Home warranty — the $400-to-$600 buyer policy is frequently a seller-paid sweetener.

The boxed insight

The seller's 8-to-10-percent bill is mostly commission — a negotiable line, not a tax. On a $500,000 sale, the difference between a 6 percent and a 4.5 percent commission is $7,500, larger than the seller's entire transfer-tax, title, attorney, and recording lines combined. Sellers who negotiate one line (the commission) save more than buyers who negotiate five.

The paper trail that protects both sides

Whoever pays what, the numbers are not final until the Closing Disclosure: the standardized five-page form the CFPB requires at least three business days before closing. It itemizes every charge both sides pay, and it is the document to read line by line against the Loan Estimate the buyer received at application. Fees that moved without explanation — a settlement fee that doubled, a transfer tax computed on the wrong base — get challenged before signing, not after. The three-day rule exists precisely because closing-day surprises used to be a business model.

Sources: Mortgage-Info, "Closing Cost Calculator for Sellers 2026" (https://mortgage-info.com/blog/closing-cost-calculator-sellers-net-proceeds-2026); AmeriSave 2026 guide, Fannie Mae interested-party-contribution limits (https://www.amerisave.com/learn/mortgage-closing-cost-calculator-complete-guide-for-home-buyers); Clever transfer-tax research, seller-pays in 89% of transactions (https://listwithclever.com/transfer-taxes/); CFPB Closing Disclosure explainer.

Questions about who pays what

Who pays closing costs, the buyer or the seller?: Both. The buyer pays 2 to 5 percent of the loan amount; the seller pays 8 to 10 percent of the price, mostly agent commission. The seller can also contribute toward the buyer's costs within Fannie Mae caps.
How much can a seller contribute to closing costs?: Fannie Mae caps seller contributions at 3 percent of the price with less than 10 percent down, 6 percent with 10 to 25 percent down, and 9 percent above 25 percent down — 2 percent for investment properties.
Can closing costs be negotiated?: Yes. Commission, transfer-tax splits, title services, repairs, and seller concessions are all negotiable in the purchase contract, even where local custom assigns them.
Do sellers pay transfer tax?: In about 89 percent of transactions the seller pays it (Clever research), but it is negotiable, and in split-custom states like Pennsylvania and Delaware the contract sets the split.
What is the Closing Disclosure?: The CFPB's standardized five-page form, delivered at least three business days before closing, itemizing every charge both sides pay. Compare it against the Loan Estimate and challenge anything that moved.