Who Pays Closing Costs When Selling a House By Owner?

When you decide to sell your house by yourself, known as For Sale By Owner (FSBO), one of the most pressing questions is: Who pays the closing costs? The answer is not straightforward, as it often depends on the negotiations between the buyer and the seller. In FSBO transactions, while the seller can potentially save on agent commissions, they might end up bearing a larger portion of the closing costs unless negotiated otherwise with the buyer.

What Are Closing Costs?

Closing costs include various fees and expenses incurred during a real estate transaction. These can consist of:

  1. Loan Payoff Costs: Expenses for paying off the existing mortgage.
  2. Transfer Taxes: Taxes for transferring the property title.
  3. Title Insurance: Insurance protects against title defects.
  4. Escrow Fees: Charges for managing the escrow account.
  5. Home Warranty Fees: Optional coverage for home systems and appliances.
  6. Inspection and Appraisal Fees: Costs for professional property assessments.

Seller’s Responsibilities in FSBO

Typically, sellers are responsible for certain closing costs, such as agent commissions in a traditional sale. However, in FSBO, where there is no agent, this responsibility shifts. Sellers may assume more costs but also have more room to negotiate who pays what during the sale.

Negotiating Closing Costs

In FSBO sales, negotiations play a key role in determining who pays the closing costs. Sellers can use the lack of agent fees as a bargaining chip to negotiate more favorable terms. It’s crucial to consider the buyer’s perspective and be open to compromises that can benefit both parties.

Legal and Financial Considerations

Handling the legal and financial aspects of an FSBO sale can be challenging. Sellers should be aware of the legal requirements and tax implications of the sale. Consulting with legal and financial professionals is highly advisable to navigate these complexities.

Pros and Cons of FSBO


  • Potential savings on real estate agent commissions.
  • More control over the sale process.


  • Greater time and effort required from the seller.
  • Risk of legal and financial mistakes.

While using a real estate agent reduces the seller’s load, it also incurs additional costs.

Closing the Sale

Finalizing an FSBO sale includes ensuring all financial aspects, including the agreed-upon closing costs, are settled at closing. Proper preparation for this stage is essential for a smooth transaction.


In FSBO transactions, closing costs are typically a point of negotiation between the buyer and the seller. While there are opportunities for savings, being well-informed and prepared for negotiations is crucial. Each FSBO sale is unique, and strategies that work for one seller may not be suitable for another.

Leave a Reply

Your email address will not be published. Required fields are marked *