Closing Costs for Buyers: Average Cost & What to Expect
Closing costs are one of the biggest “hidden” expenses when buying a home. Beyond your down payment, you’ll also need to budget for fees that finalize the purchase and mortgage.
Most home buyers pay about 2%–5% of the home’s purchase price in closing costs.
That means a $400,000 home could cost roughly $8,000–$20,000 at closing.
What Are Closing Costs?
Closing costs are the fees required to complete the home purchase. Some costs go to your lender, while others cover services like title work, appraisal, and prepaid items like taxes and insurance.
Average Closing Costs by Home Price (2%–5%)
$250,000 home: $5,000 – $12,500
$400,000 home: $8,000 – $20,000
$600,000 home: $12,000 – $30,000
What Do Buyer Closing Costs Include?
While exact costs vary, most buyers pay for:
Lender fees (origination, underwriting, processing)
Appraisal and credit report
Title search and title insurance
Escrow or settlement fees
Prepaid property taxes
Homeowner’s insurance
Recording fees (county/state)
Why Closing Costs Vary
Closing costs depend on a few key factors, including:
Your loan type (conventional, FHA, VA, etc.)
Your location (taxes and recording fees vary)
Your purchase price and loan amount
Whether you pay discount points to lower your interest rate
Whether the seller offers closing cost credits
Can Sellers Pay Closing Costs?
Yes—sometimes. In certain situations, buyers can negotiate seller concessions, which help cover part of the closing costs.
This depends on the market, the offer terms, and the home.
How to Lower Closing Costs as a Buyer
Here are a few simple ways buyers can reduce what they pay at closing:
✅ Compare lenders
✅ Ask about lender credits
✅ Negotiate seller concessions (when possible)
✅ Review your Loan Estimate carefully
Bottom Line
Closing costs are normal—but planning ahead makes them much easier.
✅ A good rule of thumb is to budget 2%–5% of the purchase price for buyer closing costs, then confirm your exact numbers with your lender early in the process.
Want a Quick Closing Cost Estimate?
If you’re planning to buy a home soon, we can help you estimate your expected closing costs based on your price range and loan type.
Contact us today to get started.