What is Closing Costs?

Closing costs are the various fees and expenses — beyond the property price — paid by buyer and seller at the completion of a real-estate transaction, typically 2–5% of the purchase price.

Closing costs cover the legal, administrative and tax work of transferring ownership: notary or escrow fees, title search and title insurance, loan-origination charges, appraisal, recording fees, transfer taxes and pre-paid items like property tax and home insurance.

In Switzerland, notary and land-registry fees plus property-transfer tax can reach 3–5% depending on canton (Geneva is high, Zurich much lower). In the US, buyer closing costs average 2–3%, seller closing costs 6–10% (including the agent commission).

Example

On a CHF 800,000 Geneva purchase, notary, land registry and transfer tax can total roughly CHF 35,000 (about 4.4%), payable in cash at closing on top of the down payment.

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Related terms

Escrow

Escrow is a financial arrangement in which a neutral third party holds money or documents on behalf of a buyer and seller until the conditions of a transaction are met.

Title Insurance

Title insurance is a one-time premium insurance policy that protects property buyers and lenders against financial loss from defects in the title to the property — such as undisclosed liens, fraud, or competing ownership claims.

Appraisal

An appraisal is a professional, independent estimate of a property's market value, conducted by a licensed appraiser, used by lenders to size mortgages and by buyers and sellers to set prices.

Stamp Duty

Stamp duty is a tax levied on legal documents — most notably on property transfers — calculated as a percentage of the transaction value and paid by the buyer to register the transaction.

Frequently asked questions

Who pays closing costs?+

Typically buyer and seller share, but the split varies by jurisdiction and is negotiable in the contract.

Can closing costs be financed?+

Some lenders allow rolling them into the loan, but this raises LTV and reduces effective equity.

Are closing costs tax-deductible?+

Mostly no for owner-occupiers; some items are deductible for investment properties.