Who Pays What? A Breakdown of Buyer and Seller Expenses in a Real Estate Sale

Who Pays What? A Breakdown of Buyer and Seller Expenses in a Real Estate Sale

When buying or selling real estate—especially land or rural property—it’s important to understand the typical closing costs and who is responsible for paying them. While some costs are traditionally assigned to either the buyer or seller, many are negotiable depending on local custom, market conditions, and the specifics of the deal.

Here’s a clear breakdown of typical real estate sale expenses, who usually pays for them, and which ones are up for negotiation.

Note that customs and practices differ by state, this information is provided as a broad review and any party to a transaction should verify this locally with a trusted advisor or attorney.

Typical Expenses Paid by the Buyer

Buyers often incur costs related to due diligence, financing, and legal ownership. These include:

• Purchase Price – The largest cost, obviously.
• Title Insurance (Owner’s Policy) – Protects the buyer from undiscovered title defects. Common in rural land deals.
• Title Search / Abstract Fees – To ensure the seller has clear title to convey.
• Survey (if needed) – Confirms boundaries and identifies encroachments or easements.
• Appraisal (if financing) – Required by most lenders to validate the property’s value.
• Loan Origination Fees – Includes underwriting, credit reports, and lender administrative fees.
• Attorney Fees (Buyer’s Attorney) – Covers contract review, title opinion, and closing representation.
• Recording Fees – To officially record the deed and mortgage with the county.
• Escrow Fees (split in some areas) – Charges for the closing agent or title company handling the transaction.
• Property Inspection (optional for land, common for homes) – Includes general condition, environmental, or perk test for septic.
• Real Estate Commission – Usually the buyer pays the commission to their buyer agent for finding the correct property and for representation in negotiations, although the fee can come from the seller, (commonly a percentage of sale price).

Typical Expenses Paid by the Seller

Sellers usually cover costs related to conveying ownership and marketing the property:

• Real Estate Commission – Usually the seller pays the commission fee for representation of their interest in negotiations with buyers and marketing the property, (commonly a percentage of sale price).
• Deed Preparation – Cost to prepare and notarize the deed transferring ownership.
• Title Insurance (Lender’s Policy, if buyer is financing) – In some states, the seller provides the lender’s policy; this varies regionally.
• Outstanding Liens or Mortgages – Must be paid off at closing from the proceeds.
• Property Taxes (prorated) – Seller pays taxes up to the closing date.
• HOA Fees or Special Assessments (prorated or fully paid) – Depending on timing and agreement.
• Escrow Fees (in some areas, split 50/50) – Title company or attorney closing services.

What’s Negotiable?

In most real estate transactions—particularly for rural land or custom deals—almost everything is negotiable, including:

• Title insurance (buyer or seller may pay depending on state or local custom)
• Survey cost (buyer often pays, but seller may agree to cover or split)
• Closing attorney/title company fees (negotiated or split between parties)
• Transfer taxes or deed stamps (typically paid by seller, but negotiable)
• Repairs or property improvements (if requested after inspection)
• Personal Property (things not attached to the real estate) Furniture, equipment, or improvements (e.g., fencing, portable buildings, or hunting blinds)

In a buyer’s market, sellers may be more willing to absorb additional costs to close the deal. In a seller’s market, buyers may offer to cover more fees to make their offer more attractive.

Example: Common Closing Cost Split in a Rural Land Sale

Final Tips

• Ask early. Don’t wait until the final negotiation to discuss who pays what—get clarity in the offer or purchase agreement.
• Check local norms. Customs vary by state and region—what’s standard in Florida may be different in Oregon or Kentucky.
• Get it in writing. The closing attorney or title company will follow the contract terms—so make sure all agreements about closing costs are clearly documented.

Understanding who pays what—and which costs can be shared or shifted—can make the closing process smoother and save both parties time and money. An experienced land broker can help you set appropriate expectations for what your expenses should be.