Who Pays What Costs During Escrow?
While many costs are negotiated during the offer/counter offer process (make sure to know what you’re asking for when you sign the offer!) there is a fairly standard allocation of costs. This is only a general guideline so please check with your real estate professional to get a better understanding. Back to our first time home buyers tips and information page.
Items the Seller can generally be expected to pay for:
- Real Estate commission – This has changed in 2024. It was customary (but always negotiable) for the seller to pay but the listing agent and buyer agent commission. In 2024 that changed and buyers are now required to sign a representation agreement with their agent that shows what amount or % they will compensate their broker IF the seller is not willing to pay. The seller will still frequently cover the amount but again….that is not as clear as it had been prior to August 2024.
- Sellers escrow fees
- County documentary transfer tax ($1.10 per $100 of consideration (sales price)
- Applicable city transfer/conveyance tax according to contract
- Document preparation fee for deed
- Any loan fees required by buyer’s lender
- Payoff of all loans in seller’s name (or existing loan balance if being assumed by buyer)
- Interest accrued to lender being paid off. Statement fees, reconveyance fees and any prepayment
penalties - Termite inspection (according to contract)
- Termite work (according to contract)
- Home warranty (according to contract)
- Any judgments, tax liens, etc., against the seller
- Tax proration (for any taxes unpaid at time of transfer of title)
- Any unpaid homeowner’s dues
- Recording charges to clear all documents of record against seller
- Any bonds or assessments (according to contract)
- Any and all delinquent taxes
- Notary fees – escrow fee
- Title insurance premium: Owner’s policy
Note: Although this is the traditional distribution of expenses associated with a sale, many items may be negotiated between the parties at the time of the offer, notwithstanding certain expenses required by the lender to be paid by seller.
The Buyer can generally be expected to pay for:
- Buyers escrow fees
- Buyer agent commission (see above in seller section)
- Document preparation (if applicable)
- Notary fee
- Recording charges for all documents in buyer’s name
- Termite inspection (according to contract)
- Tax proration (from date of acquisition)
- Homeowner’s transfer fee (if applicable)
- All new loan charges
- Appraisal fee
- Interest on new loan from date of funding to 30 days prior to first payment da
- Inspection fees (roofing, property inspection, geological, etc.)
- Home inspection
- Lender’s title insurance policy
- Homeowners insurance premium for first year
