In most cash transactions, the buyer pays all or most of the closing costs. This is one of the biggest financial advantages of selling to a cash buyer — but the details matter. Here's a full breakdown of who pays what.
What Are Closing Costs?
Closing costs are the fees and expenses associated with transferring property ownership. In a traditional home sale, total closing costs typically run 7-10% of the sale price when you combine what both buyer and seller pay.
In a cash sale, the total closing costs are much lower because there are no lender-related fees. No loan origination fee, no appraisal fee, no mortgage insurance, no underwriting costs.
Typical Closing Costs in a Cash Sale
Here's what's still involved:
Title-Related Costs
- •Title search: $200-$400 — verifies clear ownership
- •Title insurance: $500-$2,000 — protects against title defects
- •Settlement/closing fee: $300-$800 — the title company's fee for handling the closing
Government Fees
- •Recording fees: $50-$250 — filing the new deed with the county
- •Transfer taxes: Varies widely by state and county — some states charge none, others charge 1-2% of the sale price
Prorated Expenses
- •Property taxes: Prorated between buyer and seller based on the closing date
- •HOA dues: Prorated if applicable
Optional
- •Attorney fees: $500-$1,500 if an attorney handles the closing (required in some states)
- •Survey: $300-$600 if the buyer wants a new property survey
Who Typically Pays in a Cash Sale?
In most cash transactions with professional investors, the buyer covers all closing costs. The offer price you see is the amount you walk away with (minus your mortgage payoff, if applicable).
This is standard practice among experienced cash buyers, and it's the norm on platforms like FairOffer. Sellers pay zero fees — no commissions, no closing costs, nothing.
However, this isn't a legal requirement. It's a negotiation point. Here's how it typically breaks down:
| Cost | Who Usually Pays (Cash Sale) | Who Usually Pays (Traditional Sale) |
|---|---|---|
| Agent commissions | N/A — no agents | Seller (5-6%) |
| Title search | Buyer | Split or buyer |
| Title insurance | Buyer | Varies by state |
| Transfer taxes | Negotiable | Varies by state |
| Recording fees | Buyer | Buyer |
| Prorated taxes | Split at closing | Split at closing |
| Attorney fees | Each party pays own | Each party pays own |
How This Compares to a Traditional Sale
In a traditional sale, the seller's closing costs alone typically run 8-10% of the sale price:
- •Agent commissions: 5-6%
- •Title insurance: 0.5-1%
- •Transfer taxes: 0-2%
- •Attorney fees: $500-$1,500
- •Prorated taxes and HOA: varies
- •Repair credits from inspection: $2,000-$10,000
In a cash sale on FairOffer? Zero. The offer amount is your net amount (after mortgage payoff).
Can You Negotiate Who Pays Closing Costs?
Absolutely. Everything in a real estate transaction is negotiable. Here are common negotiation strategies:
Ask the buyer to cover all costs. This is standard with most professional cash buyers, but always confirm it in the purchase agreement. Don't assume — get it in writing.
Higher price vs. covering costs. Some buyers will offer a slightly higher purchase price if you agree to pay closing costs, or a slightly lower price if they cover everything. Run the numbers both ways and see which puts more money in your pocket.
Watch for hidden fees. Some cash buyers advertise "we pay all closing costs" but then deduct fees at the settlement table — administrative fees, processing fees, or "convenience" charges. Read the purchase agreement carefully and compare the offer amount to the number on the settlement statement.
Transfer Taxes: The One Cost That Varies Wildly
Transfer taxes (also called deed taxes or conveyance taxes) are the most variable closing cost, and who pays them depends on state law and local custom:
- •No transfer tax: Alaska, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah, Wyoming
- •Low transfer tax (under 0.5%): Most other states
- •High transfer tax: Delaware (4%), Washington DC (1.1-1.45%), New York City (1-2.625%), Connecticut (0.75-1.25%)
What to Look For in the Purchase Agreement
Before you sign, confirm these details in the contract:
1. "Buyer pays all closing costs" should be explicitly stated, not implied 2. No deductions from the purchase price for fees, processing, or administrative costs 3. The net amount you'll receive should match the offer price minus only your mortgage payoff 4. Who pays transfer taxes — make sure this is spelled out 5. No surprise fees at the closing table
If anything is ambiguous, ask the buyer to clarify in writing before you sign.
Why Cash Buyers Are Willing to Pay Closing Costs
You might wonder: why would a buyer voluntarily take on extra costs? A few reasons:
It's a competitive advantage. A cash buyer offering $260,000 with zero seller costs is more attractive than one offering $265,000 but making the seller pay $6,000 in closing costs. Net proceeds matter more than headline price.
The costs are relatively small. On a typical transaction, buyer-side closing costs in a cash sale run $2,000-$5,000. That's a small price to pay to win the deal, especially for investors buying multiple properties per month.
It simplifies the deal. When the buyer covers everything, there's less back-and-forth, fewer line items to dispute, and a cleaner closing. Professional buyers value smooth transactions.
The Bottom Line
In most cash sales — especially with professional investors and on platforms like FairOffer — the buyer pays all closing costs. As a seller, you should pay zero commissions, zero fees, and zero closing costs. Your net proceeds equal the offer price minus your mortgage payoff.
Always get this confirmed in writing in the purchase agreement, and watch for hidden fees that could reduce your payout at the closing table.
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