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Homeowners will always strive to make a profit after selling their private property. You calculate how much mortgage you still have to pay for your current home, extract this amount from the actual sale price, and there you have the profit, right? Unfortunately, it’s far from reality. You have to expect hidden costs, which might considerably ruin your prospects to make a decent profit. We compiled this article to highlight the closing costs a seller should anticipate and investigate which US cities offer you the most favorable closing costs terms.

A universal crash course on costs to deal with when selling a house

The home selling process is a tricky business, not without its inner secrets and backdoors. One confidential information people tend to forget is investing first to make money later. You go ahead and try it! For instance, home repairs and improvements will overall increase the value of your property. 


Before entering the juicy details, we must first point out that home-selling fees change depending on states and counties; for example, in California, every county has a different housing cost system. So pay close attention to your state’s closing guide!

Initial expenses

An experienced realtor will recommend you a pre-inspection to avert eventual unpleasant surprises when the actual house inspector arrives. Speaking of which, though you will have to put your hands deep in your pocket and pay them commissions, hiring experts to do the lion’s share of the job is highly advised! A real estate agent fee is about five to six percent of the sale price. Then your condo needs a kick-ass staging with a professional stager to create a lasting impact on your potential buyers.

Closing costs

Closing costs create a collection of fees, not including a realtor’s commission, which home buyers and sellers pay alike at the final stage of a property transaction. The good news is that you, as a seller, spend less than a homebuyer, since the homebuyer is buying the sale of the property. As a seller, your closing costs combine taxes, services, and region-specific fees. Therefore, we recommend consulting a realtor who can guide you through local tax regulations, mortgage costs, and title fees. 


Authorities impose and collect transfer taxes when the title to a piece of real estate is transferred from one person to another on a state, county, or municipal level. The sale’s location determines the price you pay. The National Conference of State Legislatures accounted for 12 states having no real estate transfer tax at all. The state of Arizona imposes a fixed cost of $2 for transfers. The remaining states impose transfer taxes ranging from 0.01 percent to 5% of the sale price.


Besides, you will have to settle the score with your original mortgage broker or agency. The sales profits are applied to your previous loan repayment; however, there may be a slight gap if the payback amount does not include prorated interest. To make up for the shortfall, you may have to write a check to the lender. In addition, if you pay off your loan early, you may have to pay a prepayment penalty. Prepayment penalties are typically set at 2% to 4% of the initial loan amount.


On average, sellers pay from one percent to three percent of their income at closing. So, if you have negotiated a sale price of $200,000, you will end up paying an amount between  $2,000 and $6,000 in closing costs.

Post-selling and relocation charges

Consider relocation costs embracing the price of moving personal belongings, residence transition, and overlap expenses! In brackets, we will add purchasing a buyer’s home warranty is a nice little touch, yet not mandatory. This type of warranty costs between $300 and $600 (an amount you reduce from your income) and covers eventual repair costs for the new owner around the house.

Did you know these 2020 statistics on closing costs?

  • In North America, the average closing cost, including taxes, was approximately $5,750.
  • The average closing cost, without taxes, was about $3,340.
  • The District of Columbia had the highest closing expenses, with taxes totaling more than $25,000.
  • The average closing cost in Indiana was $1,900.
  • Closing expenses accounted for 4.9% of the typical house price in Pennsylvania, the most of any state.
  • Closing expenses in Colorado, Wyoming, Montana, and Indiana are less than 1% of the home's original sale price.

Cities with the lowest closing costs

Based on Ascent’s statistics, let’s have a look at those US cities where you will pay minor expenses after closing the deal. 


  • Centralia, Illinois: $1,820
  • London, Kentucky: 1,980
  • Union, South Carolina: $2,140
  • Summerville, Georgia: $2,300
  • Miami, Oklahoma: $2,630.

Cities with the highest closing costs

If you wish to sell your house in the following cities (you will see they are all in the Golden State of California), you need to write off a substantial amount of money from your property sale income. General closing costs in California beat the national average. One of the reasons for this is that California features some of the most expensive private properties in the US; also, their cost of living is pretty high.


  • San Francisco, California: $11,130
  • San Jose, California: $10,770
  • Los Angeles, California: $8,110
  • Santa Cruz, California: $5,970
  • Napa, California: $5,810

Keen on how to minimize closing costs?

To tell you upfront, you can’t escape closing expenses altogether. Still, there are some entirely legal methods to lessen the financial burden on your shoulders after you have closed the deal.

Firstly, search for a title and escrow agency that has introduced a private price structure in every US state. So, all you will have to do is hire one that works with a decent commission! An escrow company is responsible for holding capital and documents between the real estate transaction parties.


The second scenario applies to those who lived only a few years in the home before selling it. You can be entitled to a reduced rate on your title insurance policy.


Let’s have a quick recap on the most usual closing costs: agent commission, transfer tax, title insurance, escrow, and closing fees, property taxes, credits toward closing costs, your attorney’s fees. 


You must pay the closing expenses at the end of the transaction when the buyer is ready to pay you and all the closing paperwork has been signed. Your selling profits will suffer a minor blow as the expenses above mentioned will be reduced. Essentially, you won’t need to bring cash to the closing unless you’re bankrupt, which means you owe more on it than your house is worth.


Undoubtedly, you don’t have to feel disadvantaged if you don’t live in one of the cities with the lowest closing costs! With a realtor’s essential assistance, you can find viable solutions to cut costs after selling your house and still maximize your profit regardless of your location. 


Note that selling a property has, without exceptions, been a complex and laborious process. Even so now, the uninvited guest, COVID-19, arrived at our doorsteps. Consequently, you might consider how to sell your house during a pandemic. But, don’t worry, your skilled real estate agent will find ways to sell your property quickly, even under such adverse circumstances!

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