Ask Val: Who Pays Closing Costs?

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: What are closing costs in a real estate transaction? Who pays closing costs in a home sale and which terms are negotiable?

Answer: When it comes to budgeting for a home purchase or sale, you’ll also need to plan for closing costs, which are due at settlement day.

Closing costs vary by state and locality, but it is customary in Virginia, D.C. and Maryland for each side to cover the taxes and fees associated with their portion of the transaction and the seller to pay the commission to both the broker/agent representing them and the broker/agent representing the buyer.

Sellers pay about .25% of purchase price, plus the commission they’ve agreed to, in closing costs. Buyers pay about 2.5-3% of purchase price in closing costs.

Here are the standard closing costs on each side of a home sale for transactions in Fairfax. Virginia:


All of the fees listed below are automatically deducted from the buyer’s payment so you do not pay any of these out-of-pocket, except for the resale package if your home is part of an HOA or Condo Association.

Commission: Sellers traditionally cover the commission for their representing broker/agent and offer a commission to the buyer’s representing broker/agent.

Title Fees: This covers the legal review and preparation of the sale documents and usually runs about $500-$1,000.

Transaction Taxes: The seller pays a transfer tax to the state, also known as the VA Grantor tax.

Prorations: You may owe or be credited for property taxes or HOA/Condo fees, based on the status of your tax payment.

Resale Package: If your home is in an HOA or condo building you are required to provide the buyer with a resale package including by-laws, reserve balance, Association inspection, etc. This fee varies by community but is usually $100-$300.


All of the fees/taxes listed below are included in your costs due at closing, except the appraisal, inspection costs and in some cases a condo questionnaire, which are all paid out-of-pocket while you’re under contract.

Lender Fees: This includes the cost of processing your loan, any points paid to reduce your interest rate, appraisal cost and any other lender-related costs. These costs often total at least $1,000-$2,000+, plus any points purchased to bring down your rate.

Title Fees: These charges include lender-required title insurance, optional buyer’s title insurance, deed preparation, title abstract search, land survey and other general processing fees to prepare the legal and administrative side of your purchase. These costs usually cost $500-$1,500, plus the cost of title insurance (if required and/or opted for), which is usually about .25-.75% of purchase price.

Transaction Taxes: You’re responsible for a handful of state and local taxes, some fee-based like the deed recordation fee and others are a percentage of the purchase price like the state and county transfer tax. Expect to pay roughly .5-.75% of purchase price in Government fees and taxes.

Pre-Paid Fees/Taxes: Most lenders require buyers to pre-pay property tax and homeowner’s insurance which they hold in escrow to ensure payment. These charges usually end up being about .5% of the sale price.

HOA/Condo Fees: If you’re buying into an HOA or condo you may be responsible for advanced payment of Association fees, capital contribution to the reserve account, move-in fees or other administrative fees. The cost varies based on the Association.

Prorations: You may owe or be credited prorated portions of the property tax or HOA/Condo fees based on the status of the sellers paid or unpaid bills

Are Closing Costs Negotiable?

Buyers may negotiate to have sellers pay up to 100% of closing costs (roughly 2.5-3% of purchase price), also known as seller credits.

This can be negotiated on the front-end of the deal, during negotiations prior to being under contract or while under contract (e.g. after the home inspection) to off-set any negative factors that are found or occur while under contract.

For sellers, there is little difference to their bottom line whether they agree to cover $5,000 in closing costs or agree to reduce the purchase price by $5,000 (minor differences show up in fees charged as a % of purchase price like taxes and commission).

For buyers, the decision to ask for closing cost assistance vs. reduced purchased price often comes down to cash-on-hand and personal finance decisions. Taking a seller credit reduces the amount of cash required to close but is effectively financing those costs by rolling them into the loan.

If you’re interested in gathering this information at any stage of your purchase or sale, I’m happy to assist; just send me an email at [email protected].

If you’d like more information, or would like a question answered in my weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, 703-390-9460.

Recent Stories

The D.C. area’s first-ever Winter Lantern Festival is coming to Lerner Town Square at Tysons II (courtesy Kaleido Arts & Entertainment Group) Thousands of lanterns will take over Lerner Town…

Fairfax County Public Schools Fairfax County Public Schools could require parental notifications for class materials deemed sexually explicit, but in a deviation from the state, the proposed policy directly addresses…

The Koons Chevy auto dealership at 2000 Chain Bridge Road (staff photo by Angela Woolsey) The developer behind Reston Station and Herndon’s stalled downtown redevelopment has turned its sights to…

A man walks by trash bins next to the curb (via Trinity Nguyen on Unsplash) (Updated at 1:25 p.m.) The service and staffing challenges plaguing trash collectors throughout Fairfax County…

Chris Green is one of the DMV’s finest fitness instructors. A Lululemon and South Block ambassador, he is a coach and mentor to so many. He embodies grace, positivity and motivation in ways that no one else can. If we could all learn a thing or two from him, the world would be a much better place. He does so much for others, and does so with a smile on his face 99% of the time.

He recently ruptured his Achilles and has an incredibly long and tough journey ahead. As if COVID hadn’t impacted fitness professionals enough, throw this in the mix and it’s a double, even triple whammy. CG is no longer able to work and do what he loves for the time being because of this and we’d love your support.

Read More

Submit your own Community Post here for just $99.

The Rhea Baker State Farm Agency is proud to support Shelter House in providing safe places to be during quarantine. Shelter House’s mission is to prevent and end homelessness and domestic violence. Right now they are providing over 200 hotel rooms to those in need in our community. In the past year, across all programs, Shelter House served nearly 500 households comprised of over 1,500 individuals, 60% of which were children.

Of the households that exited shelter, over 70% moved to permanent housing. The Baker Agency has served Vienna and Tysons residents and business owners since 2007 and proudly offers insurance solutions for you home, condo, auto insurance, life insurance and more. We offer complimentary reviews and coach teen drivers to safer, better drivers, and to help keep your auto insurance rates down! We are always happy to talk or text at 703-847-6880.

Submit your own Community Post here for just $99.


Subscribe to our mailing list