Short Answer
Closing costs are fees paid at the end of a real estate transaction for services like the loan origination, appraisal, title search, attorney review, and property transfer taxes. Buyers typically pay 2% to 5% of the purchase price. Sellers pay real estate commissions and their own transfer taxes, which total 6% to 10% of the sale price. Both sides have closing costs.
For buyers, closing costs include the loan origination fee (about 1% of the loan amount), appraisal fee ($400 to $700), credit report fee, title insurance, attorney fees, recording fees, and prepaid items like property taxes and homeowners insurance. You also pay for a survey if required. In New Jersey, the buyer typically pays for title insurance and the lender's title policy. Sellers pay the real estate commission (typically 5% to 6% total, split between buyer's and seller's agents), the NJ transfer tax, and their attorney fees. Sellers may also pay for a termite inspection and any seller credits or concessions negotiated in the contract. Both buyers and sellers should receive a Closing Disclosure form three days before closing that itemizes every cost.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
Closing costs always surprise first-time buyers. I make sure my clients know exactly what to expect before they make an offer. I review the estimated closing costs line by line so there are no surprises at the closing table. If you are concerned about cash to close, there are strategies to reduce your out-of-pocket costs, like negotiating seller credits or choosing a no-closing-cost mortgage. Let us talk through your specific situation and find the approach that works best for you.
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