Who pays the closing costs and attorney fees when buying or selling property?
Here’s the short version: both buyers and sellers have closing costs, but they pay for different things. And attorney fees follow the same pattern. But the fun twist is that some of these costs are negotiable, and what’s “normal” can vary a bit by state.
Here’s how it usually shakes out in a warm, real‑world way.
Buyers typically pay for:
- Their own attorney – In attorney states like Massachusetts, buyers almost always hire their own lawyer to review the purchase contract, handle title work, and represent their interests at closing.
- Lender‑related costs – Think appraisal, credit report, underwriting, and loan origination fees.
- Title search and title insurance (lender’s policy) – This protects the lender. Buyers often purchase an optional owner’s policy too.
- Prepaids – First year of homeowners insurance, property tax escrows, and prepaid interest.
Sellers typically pay for:
- Their own attorney – The seller’s attorney prepares the deed, resolves title issues, and handles payoff logistics.
- Real estate commissions – This is usually the seller’s biggest closing cost.
- State and local transfer taxes – For example, in Massachusetts the seller pays the state excise tax.
- Recording fees for releasing their mortgage – If they still have a loan, this gets paid off at closing.
Where things get negotiable
Sometimes a buyer asks the seller to cover part of their closing costs. Sometimes a seller offers a credit to sweeten the deal. Sometimes lender programs allow credits to be rolled in. It’s all about the market, the leverage, and the personalities involved.
The simplest way to remember it
- Each side pays their own attorney.
- Buyers pay the costs tied to getting the loan and securing the property.
- Sellers pay the costs tied to transferring the property and paying off what they owe.
That’s the heart of it.