Who Pays Closing Costs in California, NC, Michigan, Ohio, and NJ?

You have an accepted offer, and now your agent mentions that "closing costs are typically split" — but nobody tells you exactly what that means in your state. The reality is that customs differ significantly by market. In some states, sellers routinely pay most fees. In others, the buyer absorbs them. Knowing the local convention before you write your offer puts you in a much stronger negotiating position.

Why "Who Pays" Depends on the State

Closing costs fall into two categories. Government-imposed fees — transfer taxes, recording fees, stamp duties — are often split by state law or deep-rooted local custom. Lender fees and title/settlement fees, on the other hand, are more flexible and are negotiated between buyer and seller as part of the purchase contract.

State custom matters because listing agents and buyers' agents will tell you what is "normal" in their market. Knowing that baseline is the starting point for any concession request.

California

In California, both buyer and seller pay closing costs, but the split is heavily influenced by county. The general convention:

Seller typically pays: Real estate agent commissions, county transfer tax (around $1.10 per $1,000 of sale price, split or seller-paid depending on county), and their share of escrow fees.

Buyer typically pays: Lender origination fees, title insurance (lender's policy), their share of the escrow fee, prepaid interest, and property tax and insurance reserves.

City transfer taxes: Several California cities impose additional transfer taxes on top of the county rate. San Francisco, Los Angeles, and Oakland have city-level taxes that can be significant on higher-priced properties. These are almost always the seller's cost.

Practical note: California uses escrow companies rather than attorneys to handle closings, and the escrow fee is typically split 50/50 between buyer and seller. The owner's title insurance policy — which protects the buyer, not the lender — is customarily paid by the seller in Southern California but by the buyer in Northern California. This is a local convention, not a law, so it is negotiable.

North Carolina

North Carolina is a relatively buyer-friendly state for closing costs because the seller's required costs are modest.

Seller typically pays: Agent commissions, excise tax (transfer tax) at $2 per $500 of sale price (roughly 0.4%), and any outstanding liens or liens required to clear title.

Buyer typically pays: Lender fees, title search, title insurance (both lender's and owner's policies), recording fees, and all prepaids (insurance, taxes, prepaid interest).

Attorney requirement: North Carolina is an attorney state, meaning a licensed attorney must conduct the closing. This adds an attorney fee — typically $600 to $900 — to the buyer's column, though it is negotiable and can sometimes be assigned to either party.

Seller concession limits: On a conventional loan with less than 10% down, the seller can contribute up to 3% of the purchase price toward buyer closing costs. On FHA loans, the limit is 6%.

Michigan

Michigan has an unusual tradition: transfer taxes are paid by the seller, which reduces the buyer's upfront burden compared to many states.

Seller typically pays: State transfer tax (0.75% of sale price) and county transfer tax (0.11% in most counties), agent commissions, and their share of title work in some transactions.

Buyer typically pays: Lender fees, title insurance, recording fees, survey (if required), and all prepaids.

Who pays title insurance: Michigan does not have a uniform statewide custom. In the Detroit metro area, the seller sometimes pays for the owner's title insurance policy as part of the deal. In other areas, the buyer pays. It is worth clarifying early in negotiation.

Bottom line for buyers: Because the seller absorbs the transfer tax, Michigan buyers often have lower closing costs than buyers in states where that tax is split. Lender fees and prepaids remain the main expenses.

Ohio

Ohio follows a pattern where transfer taxes are technically a seller responsibility, which reduces buyer costs, but local conventions vary significantly by county.

Seller typically pays: Conveyance fees (Ohio's name for transfer taxes) — typically $4 per $1,000 of sale price — plus agent commissions and any title search issues the seller must resolve.

Buyer typically pays: Lender origination fees, appraisal, title insurance, recording fees, and prepaids.

County variation: Some Ohio counties — particularly in the Columbus and Cleveland metro areas — have developed customs where certain title or settlement fees are negotiated into the seller's column. Always check what is standard in the specific county where you are buying.

Attorney requirement: Ohio does not require an attorney to close. Closings are handled by title companies or escrow officers, which keeps costs predictable.

New Jersey

New Jersey is one of the more expensive states for buyers because several fees that are seller-paid elsewhere land on the buyer's side here.

Seller typically pays: Agent commissions, the "realty transfer fee" (New Jersey's transfer tax on the seller), and any outstanding HOA balances.

Buyer typically pays: Lender fees, title insurance (both policies), recording fees, mansion tax (1% on purchases over $1 million), and all prepaids. Attorney fees also fall to the buyer — New Jersey requires an attorney for real estate closings, and fees typically run $1,200 to $2,000.

Mansion tax: If you are purchasing a property over $1 million in NJ, the 1% mansion tax is the buyer's obligation and adds significantly to the closing cost total.

First-time buyers in NJ: There are assistance programs through the New Jersey Housing and Mortgage Finance Agency (NJHMFA) that provide down payment and closing cost assistance. These are income and purchase price limited, but worth checking if you qualify.

How to Use State Custom to Your Advantage

Understanding the local convention is the starting point for negotiation, not the endpoint. Sellers routinely agree to concessions that deviate from local custom when the market is soft, the property has sat, or you are offering full list price and asking for a credit in return.

A straightforward ask: "We are offering the full asking price, and in exchange we are requesting a $X seller credit toward closing costs and prepaids." The seller nets the same or close to the same; you arrive at the closing table with fewer dollars out of pocket.

The Closing Cost Guide breaks down which fees are negotiable across all the common line items — and provides scripts you can use when pushing back on origination charges or asking the seller to absorb specific fees. Knowing what is negotiable and what is fixed by the state is the difference between a good deal and leaving money on the table.