Closing Costs You Can—and Can’t—Negotiate

Answer

Closing costs add 2%–5% of your home’s purchase price to your final bill, and many buyers wonder: Can I negotiate closing costs? The short answer is yes—but which fees you can adjust depends on the type of cost and your leverage in the deal.

In most U.S. home purchases, closing costs break down into two categories:

• Lender and third‑party fees: These include origination fees, underwriting fees, title search and title insurance, appraisal charges and credit report costs. Since these fees flow to private companies, you have room to shop or ask your lender for waivers or credits.
• Government fees: Recording fees, transfer taxes and stamps are set by state or local authorities and rarely negotiable.

Here’s where buyers can find negotiating power:

• Loan origination fees: Ask your lender to reduce or waive points, application fees or processing charges, especially if you’ve shopped multiple quotes.
• Title insurance and escrow fees: Compare rates from different title companies; some markets allow you to choose your own.
• Seller concessions: Request that the seller pay a portion of your closing costs. In a buyer’s market or if the home has been on the market for a while, sellers may agree to cover up to 3%–6% of the purchase price.
• Prepaid expenses: You might negotiate the timing of prepaid property taxes or homeowners insurance to reduce the upfront amount.

What you generally cannot negotiate:

• Transfer taxes and recording fees imposed by local jurisdictions
• HOA move‑in fees or mandatory community assessments
• Underwriter’s required reserves for taxes and insurance

To maximize your savings, it’s advisable to compare at least three lender Loan Estimates and work with a real estate agent who understands local fee norms. Buyers are recommended to verify allowable seller concessions under your contract and state laws.

Negotiating closing costs can trim thousands off your out‑of‑pocket expenses—but limits apply. Before making a final decision, it’s advisable to consult a licensed real estate agent or attorney to tailor your approach to local market conditions.