Who typically incurs closing costs in a real estate transaction?

In a real estate transaction, both the buyer and seller typically incur closing costs. This stems from the fact that closing costs consist of various fees and expenses associated with the transfer of property ownership. For the buyer, these costs can include loan origination fees, title insurance, appraisal fees, and other associated expenses that facilitate the purchase of the home. On the other hand, the seller may also have costs such as real estate agent commissions, title-related expenses, and any outstanding property taxes or liens that need to be settled at closing.

The sharing of these costs varies depending on local customs, the specifics negotiated in the purchase agreement, and sometimes the specific agreements made between the buyer and seller. Thus, recognizing that both parties may bear some of these expenses is crucial in understanding the financial obligations involved in real estate transactions.