What are closing costs on a home sale?
‘Closing costs’ is a phrase that is more common in America than in the UK. But the principle is roughly the same over here as it is across the pond.
Closing costs are the amount of money you need to pay at the end of the home buying process.
Closing costs are the fees that cover different elements of the sales transaction, in addition to the price of the property you’re buying.
The closing costs you’ll pay depend on your specific set of circumstances, but you can usually expect to pay some of the following:
Do I pay closing costs if I’m selling but not buying?
Yes. Although there are fewer costs if you are only selling and not buying a place.
If you’re not buying, you are not eligible to pay stamp duty, mortgage fees, land registry fees (because the buyer is responsible for these) and you’re less likely to have arranged a new mortgage or need buildings insurance.
Thinking of selling?
Get the ball rolling with an in-person valuation of your home. It’s free and there’s no obligation to sell if you change your mind.
How much are home closing costs?
The amount you can expect to pay in ‘closing costs’ varies according to your circumstances and the home you’re buying.
Stamp duty
Stamp duty works out as a percentage of the home you’re buying, so long as it costs more than £250,000 (anything below that is exempt). The more expensive the property, the higher the percentage you’ll pay. Use our stamp duty calculator to estimate yours.Remember, if you’re selling but not buying, you won’t need to pay stamp duty.
Land registry fees
It costs from £20 to £305 to apply to transfer the ownership of a property online depending on its value. Applying by post costs £45 to £305. Visit Gov.uk for a full list of the Land Registry fees that apply.
Legal fees
You might pay some or all of your legal fees upfront. But in some circumstances you’ll pay these costs at the end of the home sale. The fees for legal work around buying and selling a home are fairly similar, though the buying side is slightly more expensive. The legal fees for selling a home can vary, but they are likely to be between £1,000 and £2,500.
Mortgage fees
If you arranged a new mortgage for a home you’re buying, then this point in the transaction is when the money you’ve agreed to pay will often get taken. It can be paid up front earlier in the buying or selling process, but often a lender will agree to take their fee from the amount that you are borrowing. So, because the loan you’ve secured has now been extracted and passed onto the people you’re buying from, the bank will take their fees too. If you haven’t agreed to add it onto the value of the loan, now is the time to cough up and pay them. Mortgage arrangement fees can vary, but you can expect to pay between £0 and £2,000 depending on your circumstances.
Buildings’ insurance
At the point when you become the owner of a new home, you need to have insurance for the cost of rebuilding it from scratch. This safeguards your investment against disasters. It doesn’t cover the value of the home or its contents, but specifically covers the cost of rebuilding it on the land it stands. This means the amount you pay varies specifically by postcode. Find out how to find the best deal and get an estimate.
Removal fees
Removal costs can vary depending on the size of your home and how far you are moving to. Our research shows it can cost as little as £420 for a one-bedroom flat to £1,800 for a four-bedroom house. In 2024, the average house removal cost for a three-bedroom home is £800, based on a moving distance of 15 miles. Of course, if you opt for a packing service it’ll cost you more. Learn more about the options and costs in our guide.
Estate agents’ fees
Estate agency fees will vary depending on your location and the type of service you choose. Most will charge you a percentage of the sale price of your home, which you pay once you’ve sold. A good ballpark figure for a sole agency contract, which is when just one estate agency markets your home, is between 1% and 2% of your sale price. But it’s not unusual to pay up to 3.5%, especially if you want a service with all the bells and whistles. Find out more about the services and potential costs involved.
Who pays closing costs?
The majority of closing costs are paid for by the buyer of a home. But the seller is liable for some of the costs involved, too.
As a seller (especially if you’re not buying another place that qualifies for stamp duty), the estate agents’ fees are likely to be your biggest closing cost.
How to reduce closing costs
Some costs associated with buying or selling a home are unavoidable.
The biggest ‘closing cost’ is likely to be stamp duty. You can avoid stamp duty by buying a home underneath the threshold of £250,000.
You can shop around for mortgage and insurance to make sure you’re not being charged more than you need to be.
It’s also an idea to consider doing your own removal work, as the cost of hiring a van and packing a home up yourself is less than getting a removing service in. Although we think it’s worth every penny to save yourself that stress if you can afford it.