Who Pays Closing Costs in Vermont

Who Pays Closing Costs in Vermont

If you’re looking to sell your home in Vermont, understanding the closing costs is critical. While they might not seem like the most essential part of the sale, they can make or break the deal. When you don’t know how to make the right kind of closing costs arrangements, you may end up scaring away buyers and delaying the sale of your home.

To sell your house quickly, you need to know exactly what to expect regarding closing costs. So, let’s explore the details of closing costs, including what they include and who pays them. We’ll also find out about an exciting option that will help you avoid some of the closing costs burden (as well as sell your house quickly and easily). 

Overview of Closing Costs

Overview of Closing Costs

When selling a home, you may expect to pocket the proceeds or put them towards buying a new home. However, before budgeting for that next house, you must consider how much you’ll need to pay in closing costs.

Closing costs are appropriately named, as they are expenses that arise when closing a real estate transaction. These are significant expenses that often total to thousands of dollars. The exact amount depends on your location and the value of your home. In general, closing costs range from less than 1% to almost 6% of the home’s value across the United States. 

The portion of the closing costs that sellers and buyers must pay varies by state. While there are certain items that sellers most often pay and buyers most frequently pay, there is room for negotiation when figuring out the terms of sale. 

If you want to avoid closing costs, check out companies that buy houses in Vermont.

What Are the Closing Costs in Vermont?

In Vermont, closing costs average between 2% and 3% of the property’s value. During 2020, the average home’s sales price was $272,724, and the average closing costs were 2.18% of that or just under $6,000 with taxes included.

Unlike many other states, in Vermont, the law requires you to employ the services of a real estate attorney for a real estate transaction to take place. A knowledgeable and experienced lawyer is always a significant expense, and attorney fees are part of the closing costs. These factors make Vermont one of the states with the highest closing cost percentage in the country. 

Vermont Closing Costs Inclusions

There are many different closing costs attached to selling and buying houses in Vermont’s traditional real estate market. When you put your home on the market with a realtor and find a buyer, numerous third parties are involved in getting the transaction ready to proceed. Paying these individuals results in some of the highest closing costs.

The fees discussed above are only a tiny part of the closing costs you need to pay in Vermont. Significant closing costs include the following. 

  • Realtor Commissions: The seller must pay a commission to the real estate agent or realtor. This commission – usually the most expensive fee – is the percentage of a property’s gross purchase price that realtors take as their pay. Realtor commission tends to range between 5% and 6% of the selling price. 
  • Attorney’s Fees: Everyone knows how pricey hiring an attorney can be. If you’re selling a house in Vermont, however, you must hire one. At the end of the day, though, this may be an advantage. Real estate transactions are tricky. A real estate attorney’s expertise will protect your interests. 
  • Escrow Deposit: Escrow is important in real estate. It means that there is a neutral third party that holds the funds involved in the transaction. When the transaction is closed, this third party pays out the money accordingly. The escrow deposit is also called earnest money, which you pay to show commitment to the transaction. 
  • Escrow Fee (Closing Fee): The escrow fee is money given to whatever party handles your closing. This party could be an attorney, an escrow company, or a title company. 
  • Property Appraisal Fee: This fee typically ranges from $300 to $500, and it goes to the professional home appraisal company. Lenders need to know the property’s fair market value, so they use this information when calculating the LTV (loan-to-value). 
  • Origination Fee: The origination fee most often amounts to 1% of the buyer’s loan amount. This fee isn’t always applicable, as certain lenders don’t charge them. 
  • Rate lock fee: The buyer must pay this fee so that the lender will lock in a specific interest rate.
  • Recording Fee: This government fee covers the registry and recording of the real estate sale. It’s a small fee of between $100 and $200. 
  • Survey Fee: The survey fee usually ranges from $300 to $500 for an average-sized property. The survey fee might be higher if your property is larger than average or has less typical boundaries. The survey fee covers the cost of having the property fully surveyed. All property lines are checked and made sure to be valid. 

In addition, the closing costs generally include the following fees: 

  • Pest inspection
  • Property tax
  • Title search fee
  • Prepaid daily interest charges 
  • Owner’s title insurance
  • Lender’s title insurance
  • Homeowner’s insurance 
Who Pays Closing Costs in Vermont

Who Pays Closing Costs in Vermont

In Vermont, both buyers and sellers pay closing costs. Sellers tend to cover some aspects of closing costs, while buyers tend to pay others. These vary from sale to sale, but there are certain costs that sellers always pay. 

For example, the seller must pay commission to their real estate agent, which is a set percentage of the house selling price. Fees that sellers usually also pay include the deed transfer tax and title insurance. The seller most often covers the expense of title insurance. This insurance is necessary to protect home buyers and their lenders from potential title problems that could lead to financial losses. The average cost of title insurance is $850. 

Deed transfer tax is another cost that the house seller will usually cover. This tax is necessary for transferring legal property rights from the seller to the person buying the property. 

When it comes to the escrow fee (often referred to as simply the closing fee), the seller and buyer often split the expense. This fee is needed to keep money safe until the transfer of ownership for the property. 

Other typical closing costs include home appraisal expenses that the lender requires, prepaid insurance and taxes for the home, and more. One bit of good news for sellers is that they’re never responsible for the transfer tax fee in Vermont. Buyers must always cover this expense. 

Pros and Cons of Paying Closing Costs in Vermont

Before going into more details, let’s take a quick look at the overall pros and cons of paying closing costs in Vermont.


  • May attract more potential buyers


  • Added cost
  • Could be disadvantageous for the buyer
  • Higher asking price 

Closing costs aren’t all bad. As a seller, you may be able to attract more buyers if you agree to pay more of the closing costs than required. The more closing costs you pick up, the more likely you will quickly seal the deal with a buyer. Of course, you’ll be giving up a more significant chunk of your home’s selling price. 

However, if you plan to cover some of the closing costs, you may need to increase your asking price, which may scare off buyers. After all, you won’t want to take a loss. 

It seems counterintuitive, but covering more of the closing costs can also have downsides for potential buyers. For example, there are cases when you make concessions in the closing costs, which may mean a larger mortgage and thus higher interest payments for the buyer. 

If you want to sell your house quickly and easily, it can be frustrating trying to figure out your closing costs strategy. Fortunately, there’s no need to deal with many of the usual closing costs. One of the largest closing costs for sellers is their realtor’s commission. No need for realtors when you’re selling to a cash buyer. 

Selling a house for cash is the best way to eliminate a large number of closing costs because so many are the result of buyers having a mortgage. When the buyer pays cash for your property and doesn’t need a loan, none of those mortgage-related closing costs will apply. 

Not only will you avoid burdensome closing costs, but you’ll also get to sell your house as-is. That means you won’t have to do any repairs or preparation before selling. 

Wrapping Up

As we’ve seen here, closing costs are a significant expense and a hassle. They usually amount to thousands of dollars and cover numerous fees, such as the escrow deposit, pest inspection, and origination fee. Of course, the most onerous closing expense is the realtor’s commission. 

If you’re thinking, “I want to sell my house fast in Burlington and avoid closing fees,” consider a cash buyer. That way, you won’t need a realtor, and all the money paid for your house will be yours, with no commission to be paid. 

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