Who Pays Closing Costs — Buyer or Seller?

Both the buyer and the seller pay closing costs, but they pay for different things. In a typical California transaction, sellers cover agent compensation, transfer taxes, and owner’s title insurance, while buyers handle loan origination fees, appraisals, and prepaid expenses like homeowner’s insurance and property taxes. The total is negotiable, and the purchase agreement determines the final split.

TL;DR: Sellers usually pay more in total closing costs because agent compensation and transfer taxes are calculated as a percentage of the sale price. Buyers pay the loan-related and due-diligence costs that come with financing a purchase. Either side can negotiate concessions that shift costs across the table, and in the East Bay the specifics depend on what the contract says, not on a fixed rule.

Key Takeaways

• Sellers commonly pay agent compensation, owner’s title insurance, transfer taxes, and a share of escrow fees, while buyers pay loan origination, appraisal, inspections, and prepaid costs.
• Closing costs are not set in stone — the purchase agreement controls who pays what, and concessions from either side can shift the balance.
• In California, county and city transfer taxes add a seller cost that does not exist in every state, making it especially important to budget early.
• Having 529 closed MLS transactions behind us gives our team a clear picture of what these costs actually look like at the escrow table in the I-680 corridor.

What Are Closing Costs, Exactly?

Closing costs are the fees and expenses required to finalize the transfer of a property from seller to buyer. They are separate from the sale price and from the buyer’s down payment. Some are paid before closing day — a home inspection, for example — while most are settled at the escrow table when ownership changes hands.

In the East Bay, these costs follow California custom, which differs from what you will read in national guides written for Texas or Illinois. Transfer taxes, escrow fee splits, and title insurance customs vary by state and sometimes by county. That is why a closing cost breakdown from a site focused on Chicago or Dallas will not match what you see on your settlement statement in Walnut Creek or Danville.

If you are preparing to sell your home or buy in the East Bay, knowing which costs are yours — and which are negotiable — keeps you from being surprised at closing.

Which Closing Costs Does the Seller Pay?

Sellers in California typically cover the costs that relate to transferring clear title and compensating agents. Here is what that looks like.

Agent compensation

Commission structures are decided through negotiations between sellers and their agents, and separately between buyers and their agents. In some transactions the seller covers both sides; in others each party pays their own agent. Since the NAR settlement changes took effect, it is more important than ever to discuss the commission structure with your listing agent before you sign. The seller would traditionally pay a substantial fee, often 5–6% of the sales price, to their listing agent [1]. That number is no longer automatic — it depends on the agreement you reach.

Owner’s title insurance

The seller customarily pays for the owner’s title insurance policy in California. This protects the buyer against title defects that were not uncovered in the title search, such as past liens or recording errors. It is a one-time cost paid at closing.

Transfer taxes

California charges a documentary transfer tax, and Contra Costa County adds its own. Some cities layer on an additional transfer tax. These are the seller’s responsibility in a standard East Bay transaction.

Escrow fees

Escrow fees are typically split 50-50 between the buyer and seller. In practice, the escrow officer handles the funds and documents for both sides, so sharing the cost evenly is the norm along the I-680 corridor.

Home warranty (optional)

Some sellers offer a home warranty as an incentive. A one-time cost between $300 and $500 covers one year of warranty protection [2]. It is not required, but in a slower market it can make a listing more attractive to buyers who worry about repair costs in the first year of ownership.

Which Closing Costs Does the Buyer Pay?

Buyers carry the costs tied to financing and due diligence. If you are financing your purchase with a mortgage — and most buyers in the East Bay are — these are the line items you will see.

Loan origination and underwriting fees

Your lender charges origination fees to cover the administrative cost of processing your mortgage. These are usually expressed as a percentage of the loan amount and are non-negotiable with the seller, though you can shop lenders.

Appraisal

The lender requires an appraisal to confirm the home’s value supports the loan amount. Appraisal costs usually range from $300 to $450, and can vary depending on the property’s size and complexity [2]. In the East Bay, where homes regularly sell above asking, the appraisal is the moment that determines whether there is an appraisal gap the buyer needs to cover with cash. If you are navigating a competitive market, our pricing strategy guide explains how list price and appraised value relate.

Home inspection

The average home inspection costs between $250 and $700 [2]. Buyers pay for this directly, usually before the contingency removal deadline. In the I-680 corridor we see buyers waive the inspection contingency in hot markets, but we almost never recommend skipping the inspection itself — the cost is small compared to what it can uncover.

Title insurance (lender’s policy)

Lender’s title insurance coverage costs between $500 and $1,000 [2]. This protects the lender’s interest, not the buyer’s, but the buyer pays for it as a condition of the loan. Buyer’s title insurance, which protects the buyer, costs between $500 to $3,500 depending on the scope and coverage [2].

Prepaid expenses

Prepaid property taxes, homeowner’s insurance premiums, and escrow reserves are settled at closing. The amounts depend on the purchase price, the tax rate in the specific town, and the insurance policy you choose. These are not fees in the traditional sense — they are your own future expenses collected up front.

How Does the Closing Cost Split Compare?

Here is a side-by-side view of who customarily pays what in a California residential transaction.

Cost	Typically Paid By	Notes
Listing agent compensation	Seller	Negotiated in the listing agreement
Buyer’s agent compensation	Varies	Negotiated; seller may contribute
Owner’s title insurance	Seller	Protects buyer against title defects
Lender’s title insurance	Buyer	Required by the mortgage lender
Escrow fees	Split 50-50	Standard in California
Transfer taxes	Seller	County and city rates apply
Loan origination fees	Buyer	Set by the lender
Appraisal	Buyer	Required for financed purchases
Home inspection	Buyer	Paid before contingency removal
Homeowner’s insurance	Buyer	Prepaid at closing
Prorated property taxes	Both	Adjusted to the closing date
Home warranty (optional)	Seller	Incentive, not required

Sellers often pay more overall, largely because agent compensation and transfer taxes are calculated as a percentage of the sale price. Buyers pay more individual line items, but many of them are smaller fixed fees.

Can the Seller Pay the Buyer’s Closing Costs?

Yes, and it happens regularly. Seller concessions are credits the seller offers to help the buyer cover some of their closing costs. For example, a seller may offer a credit toward the buyer’s prepaid taxes and insurance.

This is a negotiation tool. In a multiple-offer market — common in Alamo and Danville when inventory is tight — sellers rarely need to offer concessions. When a home has been sitting or a buyer’s offer is otherwise strong, concessions can seal a deal that might not close otherwise.

There are limits. FHA loans cap seller concessions at 6% of the home’s sale price [1]. Conventional loans have their own caps that depend on the buyer’s down payment. Your lender and agent should coordinate on what is allowed before you write or accept an offer.

If the buyer does not need a concession, the seller’s total closing cost exposure could decrease by 2–3%, leaving the buyer to pay 3–8% depending on their loan type and negotiated terms [1]. In other words, the split is genuinely flexible.

How Much Should East Bay Sellers Budget for Closing Costs?

The exact dollar amount depends on the sale price, the town’s transfer tax rate, and the commission structure. But sellers who want a rough framework should know that agent compensation and transfer taxes are the largest line items, and both are calculated as a percentage of the sale price.

For a home in Danville, where the team’s sold record shows a median sale price of $855,000 across 202 transactions, that is a material number. On a higher-priced Alamo sale, the transfer tax and commission alone represent a significant cash outlay at closing.

This is why we walk sellers through a net proceeds estimate before the home goes on the market. If you want to understand what you will actually take home from a sale, our home valuation page is where that conversation starts. The listing price is not the number that matters — the net after all closing costs is.

How Much Should East Bay Buyers Budget?

Buyers generally pay around 2–6% of the loan amount in closing costs [1]. On a financed purchase in Walnut Creek or San Ramon, that means budgeting for loan fees, prepaid expenses, inspections, and title insurance on top of your down payment.

The biggest variable is the loan product. A conventional loan buyer will have a different cost structure than a first-time buyer using an FHA loan. If you are buying for the first time, our first-time buyer guide breaks down what to expect beyond the down payment.

Cash buyers skip many of these costs entirely — no loan origination, no lender’s title insurance, no appraisal requirement — but they still pay escrow fees, their share of prorated taxes, and any title or inspection costs they choose to incur.

What Closing Costs Are Negotiable?

Almost everything in the purchase agreement is negotiable between the parties. The items that are hardest to move are lender-imposed fees — your mortgage company sets its own origination and underwriting charges, and those do not change because the seller agreed to something different.

What is commonly negotiated:

• Who pays the buyer’s agent: Since 2024, this is explicitly negotiated rather than assumed. Sellers can offer to cover it, buyers can pay it themselves, or the cost can be split.
• Seller concessions: A credit toward the buyer’s closing costs, usually expressed as a percentage of the sale price.
• Home warranty: The seller can include or exclude this. It is a relatively small cost that often smooths a transaction.
• Escrow fee split: While 50-50 is standard, the contract can assign it differently.
• Repairs vs. credits: Instead of fixing items found during inspection, a seller can offer a closing credit. This shifts a cost without changing the sale price.

The key is that negotiation happens in the purchase agreement, not after the fact. By the time you are at the escrow table, the contract has already determined who pays what. That is why having an agent who understands the local norms — and knows when to push back — matters more than memorizing a list of fees.

Our team has closed $527.4 million in transactions across 529 sales since 1996. That volume means we have seen virtually every variation of the closing cost split that exists in the East Bay, and we know which concessions make sense in which market conditions.

Why This Matters

As of October 2026, the East Bay housing market continues to reward sellers who price correctly and buyers who come prepared with realistic budgets. The post-NAR-settlement landscape has made commission structures more transparent, which means both sides should understand the full closing cost picture before they sign anything.

Closing costs are not a surprise if you plan for them. They become a problem only when a seller nets less than expected or a buyer shows up short at closing because nobody walked through the numbers early enough. Whether you are selling in the I-680 corridor or buying your first home in the East Bay, the time to understand these costs is before you list or write an offer — not the week before closing.

If you want a clear picture of what selling will actually cost you — or what buying in Alamo, Danville, or Walnut Creek requires beyond the purchase price — reach out to our team. We will walk you through the numbers the way we would for our own family: candidly, with the actual costs on the table.

Sources

[1] pnc.com, “Who Pays Closing Costs? | PNC Insights”. https://www.pnc.com/insights/personal-finance/borrow/who-pays-closing-costs.html

[2] zillow.com, “Buyer or Seller: Who Pays for What | Zillow”, 2025-10-06T13:53:02+00:00. https://www.zillow.com/learn/when-selling-a-house-who-pays-for-what/