Closing costs in NJ

When buying or selling a home, closing costs in NJ typically range from 2% to 5% for buyers and 6% to 10% for sellers.

This depends on the value of the property and the type of loan. It is not a single fee, but rather the sum of:

• State realty transfer taxes,
• Real estate agent commissions,
• Attorney’s fees,
• Mortgage-related fees,
• Title search in NJ,
• Title insurance in NJ,
• Property taxes, and
• Prorated HOA dues.

Since 2025, the Realty Transfer Fee has been updated for properties worth more than $1 million, which significantly increases the total amount due at closing.

If you are planning to buy, review the guide on buying a house in New Jersey, and if you are selling, take a look at how to sell a house in New Jersey.

In the following sections, you will see exactly what these costs include, how they are split between buyer and seller, and what you can do to reduce them.

Closing costs in NJ: What they include in 2025

Closing costs in NJ bring together all the expenses needed to complete the real estate transaction and record the property with the county.

According to common searches like “average closing costs in New Jersey” or “how much are closing costs in New Jersey”, the typical range is 2% to 5% for buyers and 6% to 10% for sellers.

The main items include:

• Realty Transfer Fee: This is usually paid by the seller. Since 2025, the New Jersey Mansion Tax is also the seller’s responsibility. You can review the official fee schedule through the New Jersey Division of Taxation.
• Real estate commissions: Typically between 5% and 6% of the sale price, which is why searches for “closing costs for sellers in New Jersey” are so frequent.
• Attorney’s fees: Each party usually has separate legal representation.
• Loan-related fees: These may include credit report, appraisal, inspections, discount points, and escrow deposits.
• Title search and title insurance: These protect against liens and ownership claims.
• Adjustments and prepaid items: Taxes, interest, and HOA dues up to the closing date.
• Seller concessions: These are common with FHA loans or after a home inspection. You can learn more in “What can seller concessions be used for?”.

There are also state programs that help cover part of these costs. The New Jersey Housing and Mortgage Finance Agency (NJHMFA) offers assistance for down payments and closing costs to eligible buyers.

You can find more details in “NJ first-time homebuyer programs”.

Who pays closing costs in New Jersey and why sellers often pay more

Closing costs in NJ are split between the buyer and the seller, but each side is responsible for different items.

A common question is: “Who pays closing costs in New Jersey?” This is one of the most frequent concerns for people planning to buy or sell a home in the state. Keep in mind the following:

The seller typically covers:

• Real estate commissions, which can be up to 6% of the sale price.
• State Realty Transfer Fee, which increases in brackets based on the value of the property.
• Their real estate attorney’s fees.
• Property taxes and HOA dues through the closing date.
• Negotiated concessions to the buyer, such as repair credits or direct credits at closing.

The buyer, on the other hand, usually pays:

• Loan and home inspection costs.
• Title search and title insurance, plus any discount points purchased to reduce the interest rate.
• Prepaid taxes, escrow deposits, and recording fees.

The main difference is that the seller bears the commission and realty transfer tax burden.

Before signing, both parties should carefully review the Closing Disclosure, a document required by the RESPA (Real Estate Settlement Procedures Act).

Detailed closing costs for sellers in New Jersey

Although each transaction is different, sellers usually assume the following major items:

• State realty transfer tax, averaging around 0.85% and higher for homes priced at $1 million or more.
• Real estate commissions, typically around 6% of the sale price.
• Closing attorney’s fees, required to draft the deed and coordinate disbursements.
• Property taxes and HOA dues, prorated to the date of closing.
• Bank fees and mortgage payoff costs, if there is an outstanding loan.
• Concessions to the buyer, when the parties agree that the seller will pay part of the buyer’s closing costs.

For sellers who reside out of state, there may be a withholding requirement for potential capital gains. It is advisable to discuss this with your attorney before closing.

It is also wise to review the deed and the real estate title before closing.

Closing costs for buyers in New Jersey: Common expenses and how they are calculated

For buyers, closing costs in NJ typically range from 2% to 5% of the purchase price, depending on the type of loan and the municipality.

This is one of the most frequent questions: “How much are closing costs in New Jersey?” or “how much does it cost to close on a house in New Jersey?”

These costs often include:

• Appraisal and home inspection: These help verify the property’s value and condition before the lender approves the loan.
• Mortgage lender fees: These may include credit review and processing fees. Buyers may also pay discount points to lower the interest rate.
• Escrow deposit: This covers future property taxes, insurance, and sometimes HOA dues.
• Title insurance and lien search: These protect against claims or errors in the public record.
• Transfer taxes: Although they are generally paid by the seller, buyers may have to pay part of them in some counties.
• Buyer’s attorney fees: The buyer’s attorney reviews contracts and legal documents to ensure the closing is valid and low-risk.

According to the official website of the New Jersey Housing and Mortgage Finance Agency, total buyer costs vary based on the property value and the type of financing selected.

If the buyer uses an FHA, USDA, or VA loan, the rules change slightly. Each program sets specific limits on who can pay certain costs or fees.

Typical percentages: How much you really pay in closing costs in New Jersey

On average, closing costs in NJ are about 1.7% of the sale price, based on the most recent market data.

However, this percentage can be higher in counties like Bergen, Essex, or Hudson, where property values tend to be higher.

Quick example:

• $400,000 home: Buyer’s closing costs may range from $8,000 to $12,000.
• $600,000 home: Between $12,000 and $18,000.
• $1,000,000 home: Closing costs can exceed $20,000, especially when discount points or private mortgage insurance (PMI) are involved.

In addition, buyers should plan for prepaid expenses (taxes, interest, and homeowner’s insurance). These are not extra fees but upfront payments deposited into the loan’s escrow account.

Realty Transfer Fee in New Jersey: Updated 2025 rates

One of the most important components of closing costs in NJ is the Realty Transfer Fee (RTF).

The state currently applies a progressive fee schedule based on the property value, with higher rates for homes that sell for more than $1 million.

Current Realty Transfer Fee rates:

Property value	Fee per $500 of sale price	Approximate % of sale price
Up to $150,000	$2.90	0.58%
$150,001 – $200,000	$4.25	0.85%
$200,001 – $550,000	$4.80	0.96%
$550,001 – $850,000	$5.30	1.06%
$850,001 – $1,000,000	$5.80	1.16%
More than $1,000,000	$6.05	≥ 1.21%

On top of that, properties worth more than $3 million pay an additional 1% surcharge that was introduced in 2025 to increase state revenue.

Closing costs by type of mortgage loan

The type of financing has a major impact on closing costs in NJ. There are still clear differences between FHA, conventional, USDA, and VA loans.

1. FHA loans

These loans:

• Require an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount.
• Allow the seller to cover up to 6% of the buyer’s closing costs.

2. Conventional loans

Conventional loans, on the other hand:

• Do not require FHA-style MIP, but if the down payment is under 20%, private mortgage insurance (PMI) is usually required.
• PMI rates typically range from 0.5% to 1% per year of the outstanding loan balance.

3. USDA loans

USDA loans:

• Include a 1% guarantee fee and an annual fee of 0.35%.
• Are designed for eligible buyers in rural areas who meet income and location requirements.

4. VA loans (for veterans)

Finally, VA loans:

• Do not require a down payment and do not charge PMI.
• Apply a one-time funding fee that typically ranges from 1.25% to 3.3%.
• Allow the seller to contribute up to 4% of the buyer’s closing costs.

If the buyer has not yet decided which program to use, they can review our article on types of mortgage loans in the United States, where the main options are compared.

How to calculate closing costs in New Jersey step by step

Calculating closing costs in NJ accurately is essential to avoid surprises during a purchase or sale.

Basic steps to estimate them:

• Identify the home’s purchase price. Use the amount listed in the purchase and sale agreement.
• Apply the appropriate percentage range. Multiply the price by 0.02 and 0.05 to get an initial estimate for the buyer. For example: On a $450,000 home, closing costs could range from $9,000 to $22,500.
• Add extra costs based on the type of mortgage. For example, FHA or USDA loans often involve around 1% of the loan amount in additional fees or insurance.
• Add legal and title-related fees. In New Jersey, these typically range between $1,000 and $1,500 per closing.
• Include taxes and prepaid items. Add prorated property taxes and homeowner’s insurance.

Practical example: For a purchase in Hudson County for $500,000, a buyer might pay approximately:

• Appraisal: Between $700 and $900.
• Title search and title insurance: Between $1,800 and $2,200.
• Attorney’s fees: Around $1,200.
• Prepaid taxes: Around $1,500.

Estimated total: Between $14,000 and $15,000 (roughly 2.9% of the purchase price).

Effective strategies to reduce closing costs

It is possible to lower closing costs in NJ by using smart negotiation and planning strategies. Some of the most effective options include:

1. Negotiate with the seller. Ask the seller to cover part of your closing costs; many buyers obtain concessions of up to 3% of the purchase price.
2. Shop around for lenders. Small differences in origination or appraisal fees can translate into thousands of dollars in savings.
3. Consider “no-closing-cost” mortgages. Some lenders offer to cover closing costs in exchange for a slightly higher interest rate.
4. Use state assistance programs. The New Jersey Housing and Mortgage Finance Agency offers grants and assistance to help eligible buyers pay for closing costs.
5. Review the Loan Estimate carefully. This document, required under RESPA, allows you to spot duplicate or unnecessary fees and can be reviewed using the guidance provided by the Consumer Financial Protection Bureau (CFPB).
6. Request lender credits. A slightly higher interest rate may translate into credits that reduce your upfront closing costs.
7. Avoid prepayment penalties. When refinancing, make sure there are no prepayment clauses that cancel out the savings you expected.

Assistance programs in New Jersey to help cover closing costs

Closing costs in NJ can be significantly reduced thanks to state and local assistance programs.

Many buyers search for “help paying closing costs in New Jersey” or “first-time homebuyer programs in NJ” without knowing that the state offers direct support.

Some of the main programs include:

• NJHMFA Down Payment Assistance Program. This program from the New Jersey Housing and Mortgage Finance Agency offers up to $15,000 in combined assistance for down payment and closing costs.
• Local homebuyer assistance programs. Cities like Newark, Paterson, and Jersey City may offer local funds that cover part of the closing costs or reduce loan fees for first-time buyers.
• Tax credits or local exemptions. Some counties provide discounts on transfer taxes or reduced recording fees for certain groups of buyers.

Frequently asked questions about closing costs in New Jersey

This section provides quick answers to the most common questions about closing costs in NJ.

Who pays closing costs in New Jersey?

Both parties contribute. The buyer pays for the loan, appraisal, and prepaid taxes, while the seller pays commissions, legal fees, and state realty transfer taxes.

What are the average closing costs in New Jersey?

On average, the closing costs that the buyer pays in New Jersey are about 1.7% of the sale price. However, the typical range is still 2% to 5% when prepaid taxes and other expenses are included.

Can I finance my closing costs?

Yes. Some lenders allow you to roll part of your closing costs into the mortgage, as long as the total amount does not exceed the approved loan-to-value limits.

Are closing costs tax-deductible?

Generally, no. However, certain interest expenses and discount points paid at closing may be deductible on your annual tax return.

What documents do I need for closing day?

You will need valid identification, proof of funds, the final Closing Disclosure, and a deed that has been reviewed by your attorney.

You can get a more complete overview of this process in “Home inspection in New Jersey” and “New Jersey quitclaim deed”, where we explain how to ensure that the transfer is completed without errors.

Legal guidance for your real estate closing in New Jersey

Closing costs in NJ vary based on the property, loan structure, and negotiated terms. However, understanding each component can help you save thousands of dollars and avoid costly mistakes.

With proper preparation and guidance from experienced attorneys, both buyers and sellers can achieve a safe and transparent closing.

At Curbelo Law, our team of residential real estate attorneys in NJ can help you review contracts, calculate taxes, structure credits, and protect your interests at every step of the closing process.

Contact us today to schedule a consultation and receive personalized advice regarding your real estate closing in New Jersey.