How Much Are Closing Costs in NJ? (2026)
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selling a home, such as real estate broker commissions, credit checks, title searches for the new owners, property appraisals, and other sale-related fees. Keep reading this guide to learn everything you need to know about standard closing costs in NJ.Average Closing Costs in NJ
In New Jersey, typical closing costs for homebuyers range from 2% to 5% of the purchase price, while sellers usually pay about 6% to 8%, mainly due to real estate agent commissions. For a $400,000 home, buyers might face costs of $8,000 to $20,000, covering loan origination, appraisal, title insurance, settlement fees, and prepaid expenses such as homeowners’ insurance and property taxes.
Sellers, on the other hand, could pay between $24,000 and $32,000, which includes agent commissions, state transfer taxes, and attorney fees. These costs can vary depending on transaction details, location, and negotiations.
It’s recommended that both parties get detailed estimates from their real estate agents and attorneys to better understand their specific closing expenses.
Who Pays Closing Costs in NJ?
In New Jersey, real estate closing costs are divided between buyers and sellers. Usually, the seller’s main expenses are transfer taxes and real estate commissions. For the buyer, the largest costs typically include title insurance, home inspection and appraisal fees, and the mansion tax, if applicable.
Both parties will also pay their own legal fees and several smaller charges.
New Jersey Seller Closing Costs
Real Estate Commission
Agent’s commission usually ranges from 5% to 6% of the sale price, divided between the buyer’s and seller’s agents.
Transfer Tax
State Transfer Tax: $2 for every $500 of the sale price up to $350,000, and $3.35 for each $500 above $350,000.
Attorney Fees
Legal Representation: $800–$1,500.
Outstanding Liens and Prorations
- Property Taxes: Calculated proportionally for the period the seller owned the property.
- Utility Bills and HOA Fees: Prorated up to the closing date.
NJ Buyer Closing Costs
Mortgage-Related Fees
- Loan Origination Fee: Usually 0.5% to 1% of the loan amount.
- Appraisal Fee: Ranges from $300 to $500.
- Credit Report Fee: Between $30 and $50.
- Underwriting Fee: Typically $500 to $800.
Title and Settlement Fees
- Title Search and Title Insurance: $500 to $1,500, depending on the property price.
- Settlement/Closing Fee: $500 to $1,000.
Government Fees and Taxes
- Recording Fees range from $100 to $400.
- Mansion Tax is 1% of the sale price for properties exceeding $1 million.
- Transfer Taxes are usually paid by the seller, though they can sometimes be negotiated.
Inspection Fees
- Home Inspection: $300-$500.
- Pest Inspection: $75-$150.
Prepaid Costs and Escrows
- Homeowners’ insurance costs between $500 and $1,500 per year, usually paid in advance for the first year.
- Property Taxes range from 2 to 6 months’ worth, depending on the time of year and lender criteria.
- Prepaid Interest varies according to the loan amount and interest rate.
Attorney Fees
Legal representation costs range from $800 to $1,500.
How Can I Reduce Closing Costs?
Besides the seller’s contribution to your closing costs, there are other strategies to reduce them. You might consider applying for a loan, which could help offset your costs. You can also get a real rebate from NestApple.
For instance, you could negotiate with the seller to cover some closing expenses in exchange for repaying this amount later at a higher interest rate. If the seller prefers to earn interest, they might significantly reduce your closing costs in exchange for those future payments.
It’s important to estimate and plan for closing costs before the deed transfer. A loan estimate will clarify your expected expenses, and a closing disclosure will finalize the amounts.
Since you’re responsible for these costs at closing, any discounts or exemptions—such as having the seller cover part of the costs or involving a third-party lender—must be decided beforehand. Contact a lender or mortgage banker in New Jersey to explore your options, learn what’s required to finalize your costs, and find ways to reduce them effectively.
NJ Closing Costs Bottom Line
In New Jersey, buyers typically pay closing costs of 2% to 5% of the purchase price, while sellers usually pay 6% to 8%, mainly due to real estate commissions. Both buyers and sellers should get detailed estimates from their lenders, attorneys, and real estate agents to understand the specific costs involved in their transactions.
If you’re planning to buy property in New Jersey but are unsure whether you can cover all the closing costs, consult your agent, attorney, or banker to explore your options. Use this guide to understand what constitutes a closing cost in NJ, what you might expect to pay, and who might share these costs through negotiation.
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
