What Are Closing Costs and Who Pays Them?

When buying or selling a home in Portland, the purchase price isn’t the only financial factor to consider. Closing costs play a big role in the transaction, and understanding them upfront helps avoid surprises on closing day.

What Are Closing Costs?
Closing costs are the fees and expenses that come with finalizing a real estate transaction. They typically include:

• Loan origination fees from your lender

• Appraisal and home inspection costs

• Title search and title insurance

• Escrow fees

• Recording fees with the county

• Prepaid property taxes and homeowners insurance

For buyers, these costs often range between 2% and 5% of the home’s purchase price. For sellers, the largest closing expense is usually the real estate agent commission.

Who Pays Closing Costs?
Both buyers and sellers have responsibilities when it comes to closing costs.

• Buyers usually pay for lender-related fees, appraisals, inspections, and escrow/title costs.

• Sellers typically cover real estate commissions and may contribute toward buyer’s closing costs as part of the negotiation.

In Portland’s market, it’s common for buyers to ask sellers for a closing cost credit instead of negotiating a lower price. This credit can be applied toward interest rate buy-downs, prepaid taxes, or loan fees—helping buyers reduce their upfront cash needs.

So What? Why It Matters in Portland’s Market
Closing costs directly impact your bottom line whether you’re buying or selling. For buyers, knowing these numbers helps you budget realistically. For sellers, offering to cover some of these costs can make your home more attractive and competitive in a shifting Portland market.

I work with my clients to not only understand these numbers, but also to negotiate them strategically—ensuring that your money is working smarter during the transaction.

Thinking about buying or selling in Portland? Let’s review the costs and strategies that can save you money at the closing table.

Lisa Mehlhoff Homes – Portland Realtor