As a real estate professional with extensive experience in the field, I can provide you with a detailed understanding of who typically pays closing costs in a real estate transaction.

Closing Costs Overview:
Closing costs are fees and expenses that must be paid at the time of closing a real estate transaction. These costs can be incurred by either the buyer or the seller, and they are in addition to the purchase price of the property. They are a significant part of the home buying process and can vary greatly depending on the location, the type of property, and the specific terms of the sale.

Buyer's Closing Costs:
Buyers are generally responsible for a variety of closing costs. These can include:

- Loan Origination Fees: The cost to process the mortgage application.
- Appraisal Fee: The fee for a professional appraisal of the property.
- Title Insurance: Protection against defects in the property's title.
- Closing or Escrow Fees: Fees charged by the title company or attorney for facilitating the closing.
- Recording Fees: The cost to record the transaction with the local government.
- Homeowners Insurance: Proof of insurance is typically required at closing.
- Prepaid Expenses: Such as property taxes and homeowner association fees.

Seller's Closing Costs:
Sellers, on the other hand, are often responsible for the following closing costs:

- Real Estate Commission: The most significant cost for sellers, typically 5-6% of the sale price, which is paid to the real estate agents involved in the transaction.
- Transfer Taxes: Some jurisdictions require sellers to pay taxes on the transfer of property.
- Closing Costs: Some of the same costs that buyers incur, such as recording fees and possibly some portion of the title insurance.
- Repair Costs: If there were any agreed-upon repairs from the home inspection, these are typically the seller's responsibility.
- Moving Expenses: While not a closing cost per se, moving out of the property is a cost that sellers must consider.

Negotiation and Agreement:
It's important to note that the division of closing costs can be negotiated between the buyer and seller. In some markets, it's customary for the seller to pay a larger portion of the closing costs, while in others, the buyer may agree to cover more. This negotiation can be influenced by factors such as the local real estate market conditions, the urgency of the seller to sell, and the bargaining power of the buyer.

The Role of the Real Estate Commission:
The real estate commission is a significant factor in the seller's closing costs. This commission is typically paid by the seller to the brokerage firms representing both the buyer and the seller. The commission is a percentage of the sale price and can be negotiated. Some sellers may opt to reduce their asking price in order to offer a lower commission, which can make the property more attractive to buyers.

Conclusion:
In conclusion, while buyers and sellers both have closing costs, sellers generally pay more, primarily due to the real estate commission. However, the specific allocation of these costs can vary and is subject to negotiation between the parties involved. It's crucial for both buyers and sellers to understand their financial obligations and to negotiate terms that are agreeable to both parties.

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In a closing, both buyers and sellers have costs. Home buyers pay between about 2 to 5 percent of the purchase price in closing fees, but are faced with more line-item expenses than the seller. Sellers tend to pay more at closing, as they are responsible for paying the real estate commission.May 30, 2017read more >>