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The Essential Guide to Lowering or Eradicating Closing Costs in Home Sales

By The HomeGo Team On 2023-07-31

One of the hidden secrets of financial wisdom is knowing how to lower your closing costs when selling your home. This detailed guide provides actionable strategies on how to reduce and perhaps even avoid all seller closing costs in order to optimize your gains, and make your home sale a triumphant financial experience.

Understanding Closing Costs

The first step in reducing your closing costs is understanding what they are. These are the fees and expenditures you need to pay to finalize a real estate transaction, which can include attorney fees, real estate commission, title insurance, among other costs.

Breaking Down the Closing Costs

Let’s imagine you’re selling your home for $300,000. According to Zillow, the closing costs for sellers can amount to 8-10% of the sale price, meaning you could pay as much as $30,000! But let’s dissect these costs:

  1. Real Estate Agent Commissions: This is often the largest chunk of closing costs, typically around 6% of the sale price. On a $300,000 home, that’s $18,000.
  2. Title Insurance: This ensures the buyer that the title to your property is clean, typically costing around 0.5% of the home’s price.
  3. Transfer Taxes: These vary by location but can reach up to 2% of the sale price.
  4. Attorney Fees: These costs depend on whether you decide to involve a lawyer in your transaction and can be negotiable. There are some states that require a real estate attorney to complete a home sale.
  5. Miscellaneous Costs: These include costs like escrow fees, recording fees, and other administrative expenses.

Understanding each component allows you to identify where you can negotiate and save. Make sure to research closing costs in your specific state. Check out our complete guide to seller closing costs.

How to Lower Your Closing Costs When Selling Your Home

Now, let’s delve into strategies that can drastically cut down your closing costs when selling a property.

Negotiating with the Buyer

Negotiating who pays the various closing costs is perhaps the best way to save money in the home selling process. If you have a buyer who really wants your property or multiple offers for it, leverage this to propose the buyer agrees to cover some of the closing costs. You might have to lower the asking price a little in exchange, but never lower it more than you’ll save on the collective amount you’ll save on the closing costs and fees.  This approach can significantly lower your closing costs while securing a satisfactory sale price.

This is usually more effective when you have higher demand for your property. So a good tip here is to do a little bit of work to improve the curb appeal and certain crucial areas on the inside so that more people will be interested in your home. Make sure to take a look at some simple steps on how improve the perceived home value quickly and cheaply.

Shopping Around for Services

Shopping around for various services involved in closing costs is an effective way to save significant money. By obtaining quotes from different providers for services like title insurance, home inspections, appraisals, legal assistance, and escrow services, you can compare both the prices and the quality of service offered. For instance, title insurance costs may vary widely between companies, and some might offer bundled services that include title search fees at a reduced cost. Additionally, real estate agents might negotiate their commission rates, and home inspectors and appraisers might provide their services at competitive prices. Even a slight difference in percentage or a small variation in a fixed fee can translate to hundreds or even thousands of dollars in savings. By shopping around, you not only find the best value but also gain leverage to negotiate lower fees with service providers, ensuring that you’re not overpaying for any part of the closing process. Understanding the standard rates for these services and being willing to explore different options puts you in control and leads to substantial financial savings during the home selling process.

Working with an Experienced Real Estate Agent

An experienced real estate agent can guide you through the intricacies of closing costs. The National Association of Realtors states that an effective agent can negotiate better sales terms, potentially saving you more than their commission. Make sure to proactively discuss the closing costs with an agent before agreeing to work with them.

Timing Your Sale

While the timing of selling your home is not always under your control, if you’re aware of how it can affect the home selling process, you’ll be able to make better decisions. Selling your home at the beginning of the property tax year can help lower your closing costs. You’ll only need to pay property taxes for the period until the sale is closed, potentially saving you a tidy sum. Also, if possible, selling the property when there is higher demand is always a great move. This can be hard to do, but talking with an agent experienced in the area can help.

If you have a mortgage, naturally the quicker you sell your home, the less money you are putting towards the

Finding a Cash Buyer

This is potentially the best way to save time and money during the closing process. In some cases, finding a cash buyer who is willing to cover the closing costs can be a great strategy. According to a report by ATTOM Data Solutions, nearly 56% of home sales in Q1 2020 were to cash buyers. This strategy can potentially eliminate your closing costs altogether because cash buyers can often offer to cover most or all of the expenses associated with selling your home.

You usually won’t get top market value by going this route, but it can often be the best choice when you want to sell the home “as-is”, or if selling your home quickly is of more importance.



How much can I save by lowering my closing costs?

While the savings depend on your circumstances and efforts, as seen in John’s case, they can be substantial.

Are closing costs tax-deductible?

Certain closing costs, like mortgage interest and property taxes, can be tax-deductible. Always consult with a tax professional for advice.

Can I negotiate closing costs with the buyer?

Yes, it’s common for buyers to cover part of the closing costs in exchange for concessions, like a slight reduction in the sale price.

What’s the average percentage of closing costs when selling a home?

Closing costs typically range from 6% to 10% of the home’s sale price.

What services should I shop around for to save on closing costs?

You should compare prices for services such as title searches, home inspections, and appraisals.

When is the best time to sell my home to minimize closing costs?

Selling your home at the beginning of the property tax year can result in lower pro-rata property taxes and other savings.


Selling your home doesn’t have to feel like a financial hurdle. With the right strategies and knowledge, you can significantly reduce your closing costs. By learning how to lower your closing costs when selling your home, you’re poised to save a good amount of money when selling your home.

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