Understanding Closing Costs in a Real Estate Transaction: Who Pays?

Written by Posted On Monday, 01 April 2024 05:31

Closing costs are an important part of any real estate transaction. At the end of the day selling a house is about dollars and cents, and sellers want to be able to put the most they can in their pocket. Closing costs in a real estate transaction involve various fees and expenses associated with finalizing the sale of a property. Determining who pays these costs can vary depending on the type of transaction and the parties involved. In this article, we'll explore the in's and out's of closing costs and shed light on who typically bears these expenses in different scenarios.

Closing Costs in a Traditional Real Estate Transaction

In a traditional real estate transaction involving a real estate agent, both the buyer and the seller are responsible for paying their own closing costs. These costs can include:

  • Title Insurance: Protects the buyer and lender against any defects or disputes regarding the property's title.
  • Loan Origination Fees: Charged by the lender for processing the loan application and initiating the mortgage.
  • Appraisal Fees: Covers the cost of appraising the property's value to determine its market worth.
  • Attorney Fees: Legal fees associated with reviewing contracts and facilitating the closing process. This includes doc prep fee's where the closing attorney prepares all of the documents which will need to be signed at the closing.
  • Recording Fees: Charged by local government agencies for recording the deed and other documents related to the sale.
  • Transfer Taxes: Taxes imposed by state or local governments on the transfer of property ownership. In Orleans Parish there is a $325 transfer tax whenever someone sells a property. Jefferson Parish does not have any sort of transfer tax.

Additionally, if a real estate agent is involved in the transaction, the seller typically pays the agent's commission, which can amount to up to 6% of the sales price. This commission is negotiated between the seller and the agent and is deducted from the proceeds of the sale. There has been plenty of new lately about real estate commissions and even thought there was a big settlement awarded I personally don't see commission structures changing much, if at all, anytime soon.

Closing Costs with a Professional Home Buyer

In contrast to traditional real estate transactions, selling a house to a professional home buyer offers a unique advantage when it comes to closing costs. Professional home buyers specialize in purchasing properties directly from homeowners, often in as-is condition and without the need for listing with a real estate agent. Here's how closing costs differ when working with a professional home buyer:

  • No Fees or Commissions: Unlike traditional real estate agents, professional home buyers do not charge any fees or commissions for their services. This means that sellers can avoid the hefty commission fees typically associated with real estate transactions.
  • Covering All Closing Costs: In addition to waiving fees and commissions, professional home buyers often cover all closing costs associated with the sale. This includes title insurance, attorney fees, recording fees, and any other expenses related to the transfer of ownership.
  • Streamlined Process: Selling to a professional home buyer usually involves a streamlined and expedited process, with minimal paperwork and hassle. This allows sellers to save time and avoid the complexities often associated with traditional real estate transactions.

The Benefits of Selling to a Professional Home Buyer

Selling your house to a professional home buyer offers numerous benefits beyond just saving on closing costs:

  1. Speed and Convenience: Professional home buyers can often close on a property within days, providing sellers with a quick and hassle-free transaction.
  2. No Need for Repairs or Renovations: Professional home buyers purchase properties in as-is condition, relieving sellers of the burden of making costly repairs or renovations.
  3. Flexible Terms: Professional home buyers are willing to work with sellers to find a solution that meets their needs, whether they're facing foreclosure, inheriting a property, or simply want to sell quickly.
  4. Certainty and Reliability: Selling to a professional home buyer provides sellers with the certainty and reliability of a guaranteed sale, without the uncertainty of waiting for offers or dealing with potential buyer financing issues.


Who pays the closing costs in a real estate transaction varies depending on the type of transaction and the parties involved. In a traditional real estate transaction with a real estate agent, both the buyer and the seller typically pay their own closing costs, with the seller also responsible for the agent's commission. However, selling to a professional home buyer offers a distinct advantage, as sellers can avoid fees and commissions and have all closing costs covered by the buyer. This streamlined and convenient process allows sellers to save time, money, and hassle while achieving a quick and efficient sale of their property.

Call NOLA Buys Houses today at 504 264 1407 or visit us at www.nolabuyshouses.com to find out more about us and our process. We can give you a cash offer on your home in 24 hours and there is never any obligation to work with us. We are on call 24/7 and are here to help!

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Carl Fanaro

We are a professional house buying company that has been in business for over 20 years. We buy houses fast with cash all over the greater New Orleans area


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