Who pays closing costs when buying or selling a home?

The list of home-buying closing costs is long. The real question, though, is who pays closing costs.

Some closing costs are paid by the seller, others by the home buyer — but practically all are negotiable. Consult the Yahoo Finance guide to closing costs for a detailed list, with an estimate of the total of each fee.

We're here to answer your question simply and to the point: Who normally pays closing costs?

Read more: Closing on a house — What to expect and how to prepare

In this article:

Closing costs are all the expenses paid when you sign the loan documents to get the keys to your new house. There are lender fees, prepaid costs, third-party payments, and more.

Here's how those costs are typically divided between the buyer and the seller.

Learn more: What if you can't afford closing costs? 6 ways you can still buy a home

Just as when you buy a house, you also have to pay closing costs when selling your home. With the qualification stated above in mind — almost everything is negotiable — here are the closing costs typically paid by the seller.

• Fee to the attorney, settlement agent, escrow agent, or closing agent to facilitate the loan closing

• Mortgage loan payoff (if applicable): the money you receive from the home sale pays off your existing mortgage balance

• Real estate agent commission

• Repairs to the home for issues related to an inspection

• Prorated property taxes

• Termite inspection

• Title transfer taxes

A note about real estate commissions: Following a legal settlement, buyers are now responsible for paying their real estate agent. For many years, it was common for sellers to pay the real estate agents representing both sides of the transaction: seller and buyer. That is often still the case because sellers may want to make their listings as attractive as possible, but this can vary by market due to housing demand.

Dive deeper: Real estate agent fees — What percentage do Realtors get?

Closing costs can vary by mortgage lender, but here is a list of fees most buyers can expect to pay.

• Appraisal fees

• Attorney fees

• Credit report fee

• Discount points, also called mortgage points (optional)

• Document recording fee

• Home inspection fees

• Origination fee (sometimes) — see our note below about other lender fees

• Title insurance

• Private mortgage insurance for conventional loans; mortgage insurance premiums for FHA loans; a funding fee for VA loans

• Real estate agent commission

• Survey fee

• Tax stamps

• Title search

Keep learning: What is mortgage insurance, and how does it work?

Lender fees paid by home buyers can include an origination charge, application fee, and underwriting fees. The Loan Estimate you receive from the lender will show these charges in Section A on page two under "Loan Costs" and "Origination Charges."

When you see multiple charges in the “Origination Charges” section, ask for justification and see if the lender will waive some of them.

Use your bargaining power of shopping more than one lender as leverage.

Read more: 7 strategies for reducing closing costs

Another category of closing costs is prepaid fees. As a buyer, these are expenses that are coming due or are prorated before your first monthly mortgage payment. For the seller, they are final prorated payments.

Learn more: What is per diem interest when closing on a house?

Fannie Mae, a government-sponsored company that provides capital to the housing market, has an excellent closing costs calculator to help you estimate the fees you'll pay.

By inputting some loan details and where the house is located, it will detail the closing costs you can expect to pay. Each charge is broken down into a "low," "middle," and "high" fee range for loan origination fees, settlement and title fees, third-party fees, and taxes and government fees.

The tool draws data from actual closing costs in your area over the past 18 months for typical closing costs on conventional loans.

Dive deeper: What is a conventional loan, and how do you get one?

Typically, sellers have paid the most closing costs because they have paid the commissions for both the seller's and the buyer's real estate agent. Closing costs for buyers have usually averaged 2% to 5% of the home's purchase price. For sellers, closing costs have been from 8% to 10% of the sales price. These estimates are subject to change as the real estate agent commission changes filter through the industry.

In some real estate markets, sellers may offer to pay all or a portion of the buyer’s closing costs. Such seller concessions are an effort to make their listing stand out in what is likely a time of weak home sales.

You will know ahead of time just how much you will owe at closing. First, the costs are approximated in the Loan Estimate you receive after applying for the mortgage loan. Then, three days before closing, you will get a detailed accounting of the closing fees in the Closing Disclosure. If you believe you won't be able to pay the total due, you will need to talk to the seller and the lender to see if they will work with you. If not, you may lose your earnest money — and the deal on the home.

This article was edited by Laura Grace Tarpley.