Who typically pays for closing expenses, such as transfer taxes?

The reason the answer emphasizes that both buyer and seller may share the responsibility for paying closing expenses, including transfer taxes, is rooted in standard real estate practices and state regulations. Typically, closing costs can encompass a variety of fees, including title insurance, appraisal fees, attorney fees, and transfer taxes, which are indeed subject to state laws and customs.

In many real estate transactions, it’s common for the buyer and seller to negotiate which specific costs each party will cover, often leading to a division based on local customs or the specifics of the sale contract. For instance, in some jurisdictions, it may be customary for the seller to pay the transfer taxes, whereas in others, the buyer may absorb those costs. Therefore, stating that both parties may be responsible reflects the flexibility and variability inherent in real estate transactions, as well as the importance of local laws and practices in determining who ultimately pays which expenses.

This understanding highlights the need for buyers and sellers to be aware of these costs during negotiations and to consult local real estate practices, ensuring that all parties are prepared for their financial obligations at closing.