Closing Costs in Pennsylvania: A Guide for Sellers

Reconveyance fee

After the sale of your home is complete and your mortgage is fully paid off, you may be required to cover a reconveyance fee. This fee covers the processing of a reconveyance deed, a legal document that officially releases you from the debt tied to your mortgage.

Your mortgage lender will be responsible for recording this deed with the appropriate county or state office. The cost of the reconveyance fee can vary depending on your location, so it’s important to be aware of the potential expense.

Realty transfer tax

You also might be responsible for what’s known as a realty transfer tax. These are fees assessed by local governments whenever a property changes ownership.

These taxes are sometimes called a “Deed Excise tax” or a “Documentary Stamp tax.” Who ultimately pays these taxes depends on the state, city, or county where the sale occurs.

In Pennsylvania, for example, both buyer and seller are typically responsible for covering transfer taxes as part of the closing costs.

Real estate agent commission

Unless you’re selling your home for sale-by-owner, you’ll likely have used a local agent. Research indicates that an agent’s expertise can significantly impact your sale: In 2023, homes sold with an agent’s assistance had a median price of $405,000, compared to $310,000 for FSBO sellers.

Working with a real estate agent means paying a commission. This fee covers various services, such as accurately pricing your home, marketing it effectively, and negotiating with buyers to ensure you receive the best possible price and terms.

It should be noted, however, that on March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.

HomeLight’s transaction data reveals that the national average real estate agent commission is 5.8% of the property sales price. This commission typically includes fees for both the listing and buyer’s agents, with sellers customarily covering the cost.

Use HomeLight’s commission calculator by entering your city for commission data tailored to your specific area.

Attorney Fees

Some states require an attorney to be present when closing the sale of a property.

Real estate attorneys are not essential for closing, but your real estate agent may suggest working with one anyway.

Homeowners Association/Condo Fees

One of the biggest sticking points for sellers is the fees levied by their homeowners’ association (HOA) or condominium association fees.

Like other fees we’ve discussed, these will vary, not just because of the different rules and regulations of your local HOA but also because HOA regulations vary greatly depending on the state. These fees (or dues) are usually prorated at the time of the sale.

The average monthly HOA fee in Pennsylvania is $385.

Seller’s concessions

In Pennsylvania, sellers might be responsible for covering certain costs at closing due to financing concessions agreed upon during negotiations. These concessions often involve contributing towards closing costs, repairs, or even offering home warranties to sweeten the deal for the buyer.

A typical concession is repair credits, which come into play when a buyer includes a contingency related to the home inspection. If the seller declines to make repairs identified by the inspector, the buyer can back out with their earnest money intact. Instead of handling the repairs themselves, sellers can offer repair credits, which provide cash to cover repair costs at closing. However, these concessions are less common in seller’s markets, as contingencies can be less attractive to prospective buyers.

Miscellaneous closing costs/fees

These are some of the most common closing costs you’ll face as a seller in Pennsylvania. However, it’s worth noting that many of these costs are negotiable. Your buyer might be open to discussing terms, and working with a top local agent or real estate attorney could help you secure a better deal on closing expenses.

If you’d rather bypass the traditional process of working with an agent and negotiating costs, consider HomeLight’s Simple Sale program. With Simple Sale, selling your home becomes straightforward with just three steps: provide basic details about your home, connect with one of our Home Consultants, and potentially sell your home in as little as 10 days.

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