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Real Estate Transactions: Who Pays for What?

Ready to sell? Ready to buy? Let's do this! But wait, what will you pay for?!

There are several costs associated with buying AND selling a home and it can be quite confusing to figure out exactly what you will end up paying for. The term 'closing costs' really encompasses a handful of costs, so let's break down what you'll be paying for when buying or selling a home.

First, it's important to note right from the start that, whether you've hired a REALTOR® or decided to go on with selling or purchasing without one, closings costs exist for both. Attorney fees, etc. are costs incurred with or without the help of an agent!

Sellers: What You Pay For

Typically, the sellers have higher costs associated with selling their home. This is the case with selling no matter where you live. So, what exactly are you paying for?

Abstract Continuation

Your home's abstract is its legal history as a hard, tangible document. With each ownership change, this document is updated by an attorney. Once you get an accepted offer on your home, the abstract is continued by the closing company's attorney or an attorney of your choosing. No matter which way you go, there are fees associated with this update.

Deed & Seller Document Preparation

Several documents accompany the sale of your home, including your deed. The closing company creates these documents for us and, of course, there are fees associated with doing so. The closing company will also create a title opinion to ensure that your home has a clean title. But, the good news here is that the buyer pays for this! You're only responsible for the abstract, which is then sent off for the buyer's closing company or attorney (if different from your own) for them to create a Title Opinion, ensuring a clean title before closing.

Real Estate Office Transaction Fee

Each real estate office charges what is called a transaction fee. This fee is typically only around a few hundred dollars. So, what does this pay for? The big one is document storage. Most, if not all, REALTOR® offices store electronic versions of all listing and closing documents for an indefinite period of time.

If you ever need any document from your file, we can access it in a matter of minutes and get it to you! No digging through your personal files- it's as simple as reaching out to us!

Transfer & Property Taxes

Transfer taxes are a one-time fee for the transfer of the deed. This is a government-instituted fee that, you got it, happens when you transfer ownership of your property to the buyer.

When selling, you will need to ensure that your property taxes are brought up to date. Because these taxes are paid for in arrears, it's important to speak with your REALTOR® regarding what your estimated taxes will be as there's a fairly simple way we can calculate this for you.


In our market, and most across the U.S., sellers typically pay the REALTOR® commission. The commission percentage varies from brokerage to brokerage and is even sometimes based on the sale price of your home. No matter how you slice it, REALTORS® are working hard for these dollars behind the scenes. Everything we mentioned above? Yeah, we take care of that so you don't have to! Because- selling should be a breeze. And, that's exactly how we want it to stay

Buyers: What You Pay For

Buyers, while you'll have fewer fees for your purchase, there are still costs associated that you'll want to know a bit more about before putting in an offer on your dream home.

Lender Fees

Of course, if you're paying cash, lender fees will not apply to you. However, many home buyers finance, which lends itself to a few more fees associated with securing your loan. Lender charges can include commitment fees, obtaining a credit report, building your escrow account and more. Speak with your lender regarding which fees apply to you and how they will factor in to your overall closing costs and loan amount.


The cost of an appraisal is also something incurred through your lender as, when financing, it is required. If you're paying cash, however, an appraisal is always optional.

An appraisal is conducted by a third-party and determines the current value of your home. The appraiser will take into account any updates done to the home during current ownership and more.


Inspections, while always optional, are something you'll need to budget for should you desire to obtain one. There are several levels of inspections available as well as types (radon testing or pest inspections, for example). Inspection companies vary in price, as with any business.

Locally, we've worked with many inspectors in the area and are quite familiar with the services they provide as well as their overall customer satisfaction. All inspectors are not the same!
Title Opinion

As I mentioned above, the title opinion is something paid for by you, the buyer. The title opinion shows any liens against the property. They can consist of the mortgage or other debts the seller may have outstanding. Name changes or the need to removed deceased persons will also show up on a title opinion.

The job of the title opinion is to not only show these issues but provide us an opportunity to make sure all problems are solved before your closing date. After all, we want you to have a clean title when you take ownership!

Keep in mind that these are not necessarily comprehensive lists. Depending on your location, closing company, etc., additional fees may exist not mentioned above.

It is never a bad idea to talk with your REALTOR® for more clarification. With both listing and buying, your agent should break down the costs for you right away and show you the final (typically estimated) cost(s) for either buying or selling.


Looking for a bit more info? Gordie is happy to provide! Check out this short video breaking down even further the fees incurred from buying and selling a home.



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