Closing costs are the transaction fees of buying or selling real estate beyond the price itself: title search and title insurance, escrow and closing fees, lender origination and underwriting (when a loan is involved), recording fees, transfer taxes where they exist, surveys, and attorney fees where attorneys close. Investors meet them twice on a flip — once buying, once selling — and selling-side costs commonly include agent commissions, which are usually the largest single line.
The formula / structureNo single formula — total the transaction's fee schedule; selling-side costs often run several percent of the sale price including commissions.
Closing Costs: a worked example
Worked example. Buying a $110,000 property with cash in this example: title, escrow, recording, and policy fees total about $2,400. Selling the finished flip at $230,000: commissions plus seller-side fees and concessions total about $17,900. Both figures belong in the analysis from day one — omitting the sell side is a classic beginner error.
What affects Closing Costs
- Whether financing is used (lender fees apply only with a loan)
- State and local transfer taxes and customs (who customarily pays what)
- Agent commissions on the sale
- Title and attorney requirements of the jurisdiction
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