Understanding Closing Costs: What Buyers and Sellers Need to Know

Buying or selling a home comes with a lot of moving parts, and one of the most common questions people have is about closing costs. They’re talked about often, but not always explained clearly, which can make the final steps of a transaction feel confusing or stressful.

Let’s break it all down in a simple, approachable way so you know exactly what to expect when you reach the closing table.

What Are Closing Costs?

Closing costs are the fees and expenses that come with finalizing a real estate purchase or sale. They’re separate from your down payment and can vary based on the loan type, property location, and terms of the transaction.

They might not be the most exciting topic, but understanding them helps you plan, budget, and avoid surprises.

Closing Costs for Buyers

Buyer closing costs typically include:

1. Loan-Related Fees

These come directly from the lender and may include:

• Loan origination fee

• Credit report fee

• Appraisal

• Discount points (if you’re buying down the interest rate)

2. Title & Escrow Fees

These protect your ownership and ensure a legal, smooth transaction:

• Title insurance

• Title search

• Escrow closing fee

3. Prepaids

Your lender may require certain costs to be paid upfront:

• Homeowner’s insurance

• Property taxes

• Prepaid interest

4. Inspection Fees

While optional, inspections are highly recommended:

• Home inspection

• Sewer scope

• Radon test

• Pest inspection

How much do buyers usually pay?
In Oregon, it’s common for buyers to pay around 2–3% of the purchase price, depending on their loan and insurance selections.

Closing Costs for Sellers

Sellers have fewer line items, but some of the costs are larger:

1. Agent Commissions

This is the biggest seller expense and covers both the listing agent and the buyer’s agent.

2. Title & Escrow Fees

Sellers typically pay:

• Owner’s title insurance policy

• Escrow closing fee (usually split with the buyer, depending on region)

3. Prorated Costs

These are charges for the portion of time you owned the home:

• Property taxes

• HOA dues

• Utilities (depending on the agreement)

4. Repairs or Credits

If repairs were negotiated during the inspection period, the seller may cover:

• Agreed repairs

• Buyer credits in lieu of repairs

How much do sellers usually pay?
Most sellers can expect 6–8% of the purchase price, with commissions making up the majority.

Why Closing Costs Vary

Every transaction is unique. Closing costs change based on:

• The lender you choose

• The property type

• Whether you’re buying new construction

• Local tax and insurance requirements

• Negotiated terms between buyer and seller

This is one reason working with a realtor matters, we help you understand your numbers long before closing day.

Can Closing Costs Be Negotiated?

Sometimes, yes.

Buyers can ask for seller credits to help offset costs, especially in slower markets.
Sellers can negotiate repair requests or adjust credits to balance the final figures.

It all comes down to strategy, timing, and understanding the current market, which is where having an experienced agent in your corner makes a big difference.

Final Thoughts

Closing costs aren’t the most glamorous part of buying or selling a home, but they’re one of the most important. When you know what to expect, everything feels smoother, clearer, and far less stressful.

If you’re preparing to enter the market, or you just want to understand your numbers, I’m always here to help you break things down step by step. A little clarity goes a long way when you’re making one of the biggest financial decisions of your life.