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If you’re looking to buy a home in New Jersey, you’ve probably already been saving for a down payment and determining how much house you can afford. But have you taken all possible closing costs into account?

In the Garden State, closing costs run $1,010 higher than the national average, so it’s important to be prepared for a significant expense. We’ll look at location-based data and consider expert experience to help give you an idea of what to expect when closing on a home in New Jersey.

What are closing costs?

Closing costs are a set of fees related to buying a house, which are usually due on the official date of purchase (also known as closing). Some of these costs, such as surveys and recording fees, are one-time expenses related to the sale. Others, such as origination and application fees, are directly related to obtaining a mortgage. And some, such as property taxes and insurance, are simply related to homeownership in general.

Richie Helali, a licensed, senior mortgage advisor at HomeLight Home Loans, says that closing costs are most often paid through wire transfer or certified check, along with the down payment for your home loan (which is not part of your closing costs but is typically due at the same time).

If the total amount of your closing costs plus your down payment is financially overwhelming, sometimes lenders will allow you to add the closing costs into the total amount of your loan, thus reducing the amount of cash needed at closing.

We’ll provide some example closing costs in a minute to illustrate how this all plays out.

Who pays for closing costs in New Jersey?

Both buyers and sellers are responsible for certain closing costs. Typically, buyers are responsible for mortgage and inspection-related costs, and sellers are responsible for agent and documentation-related costs.

In general, these are the ranges you can expect when figuring out who pays closing costs in New Jersey.

Buyers typically pay: 2%-3% of the home’s price.
Sellers typically pay: 5%-8% of the home’s price (including agent commissions that average 4%-6% in NJ.)

That said, buyers and sellers can negotiate to determine who pays specific closing fees. For example, a motivated seller might consider covering part or all of the inspection and appraisal fees for a buyer in order to help close the deal. Sellers in cooler markets may even offer a certain amount of “cash at closing” to help the buyer with loan fees and other expenses.

How much are closing costs in New Jersey?

With the help of Anita Jacobus, a top-performing agent in Toms River, NJ, we’ll break down the typical closing costs in New Jersey. Jacobus, who has 24 years of experience, says that when she begins working with a new client, she will outline the expected closing costs in a way that best reflects their situation. That way, buyers and sellers can have a round number in mind regarding what they’ll need to bring to the closing table.

Buyer closing costs in New Jersey

In New Jersey, the buyer is usually responsible for the following costs and fees at closing.

Closing cost item	Typical cost to buyer
Appraisal fee	$300-$450
Title search fee (often split with seller)	$700-$1,000
Loan origination fees	$2,100
Loan application fee	$25-$50
Upfront principal and interest (sometimes 2-3 months collected at closing)	varies by loan terms
Credit report	$15-$45
Home inspection	$650
Termite inspection (lender may require)	$85-$250
Survey fees (lender may require)	$700-$1,000
Recording fees	$250-$350
Additional inspections (radon, pool, bulkhead, foundation, etc.)	varies by necessity
Attorney fees (optional but recommended)	$1,100
Insurance escrow (lender may require)	varies by situation
Property taxes*	varies by county & time
Typical buyer closing cost total	$10,500 (2.5%)

Jacobus likes to remind buyers that these figures do not include the down payment on the home, a significant sum that varies greatly based on your loan type. In addition, buyers may or may not need to pay for homeowners insurance upfront, depending upon the requirements of the lender. Your real estate agent and/or insurance agent can help you with the most accurate estimate of costs, but the average cost of homeowners insurance in New Jersey is $965 per year.

Seller closing costs in New Jersey

On the other hand, the seller is usually responsible for the following closing costs in New Jersey.

Closing cost item	Typical cost to seller
Real estate commission (4%-6%)	$21,000
Real estate transfer tax (1%-2%)*	$4,200
Title search fee (split with buyer)	$700-$1,000
Attorney fees (optional but recommended)	$1,100
Transaction fee	$250-$550
Recording fee (to release mortgage)	$90
Continued certificate of occupancy	$150
Smoke certification	$55
Home warranty (optional)	$530-$1,100
HOA transfer/prorate fees	$150-$500
Outstanding amounts (utility bills, last mortgage payment, etc.)	varies
Typical seller closing cost total	$29,400 (7%)

How can I estimate my closing costs as a buyer in New Jersey?

Every real estate transaction is a little different because there are numerous factors involved with each sale. However, with the above details in mind, here’s what buyers in New Jersey can reasonably expect closing costs to look like, in round numbers.

*Home price*	2% closing costs	3% closing costs
$350,000	$7,000	$10,500
$400,000	$8,000	$12,000
$450,000	$9,000	$13,500
$500,000	$10,000	$15,000
$550,000	$11,000	$16,500
$600,000	$12,000	$18,000
$650,000	$13,000	$19,500
$700,000	$14,000	$21,000
$750,000	$15,000	$22,500

To get a preliminary estimate of your closing costs in New Jersey, you may want to try free online tools such as HomeLight’s Closing Costs Calculator. By doing so, you can plug in numbers that more closely resemble your particular homebuying situation.

Other handy tools from HomeLight include our Home Affordability Calculator and Down Payment Calculator. With these tools, buyers can better determine their price point while house shopping.

But the best way to determine what your closing costs and price point will be is to partner with a top real estate agent and mortgage advisor in New Jersey. Most experienced agents will walk through a closing cost worksheet with you, as Jacobus does for her clients.

How can I lower my closing costs in New Jersey?

According to ClosingCorp’s latest Purchase Mortgage Closing Cost Report, closing costs in New Jersey rank as the twelfth highest in the nation. While the costs can add up, here are some ways buyers and sellers might be able to minimize closing costs:

Negotiate with the seller to pay your closing costs: Buyers in New Jersey may be able to negotiate with sellers to cover some of the closing costs on the sale. If your area is experiencing an inventory shortage, sellers may be less likely to barter, but it doesn’t hurt to ask. For the seller, it’s all about how much they walk away with and selling on a timeline that fits their objectives.
Buy for cash or sell to a cash buyer: A cash buy or cash sale can eliminate two of the biggest expenses: mortgage fees and commissions. Typically, homeowners who sell to cash-buying companies don’t pay any closing costs.
Shop around for a mortgage company or loan: Compare interest rates as well as incentives and closing costs. If you are planning ahead, raising your credit score can also help lower some of the lender fees and points.
Shop around for a real estate attorney: If you decide to hire an attorney for your home purchase, you might save on fees by hiring an attorney in a smaller town. However, it’s crucial to hire an attorney that specializes in real estate law.
Shop around for a real estate agent: Sellers can save on their closing costs by hiring a broker that charges a lower commission rate. Alternatively, some agents may be willing to negotiate a lower commission. For example, a discount brokerage may save the seller 0.5%-1% of the listing commission. However, an experienced local real estate agent that charges full commission is more likely to negotiate the best deal on your behalf.

Remember, every situation is different, so for home-purchase peace of mind, team up with a savvy New Jersey real estate agent who is well-informed about local market conditions; they’ll know what’s “normal” for the city and county you’re buying in and where sellers might bend.

How can I find a top real estate agent in New Jersey?

HomeLight can connect you with some of the most experienced buyer’s agents in New Jersey. Simply answer a few questions, and our Agent Match platform will analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.

Additional expert insights about closing costs in New Jersey

Jacobus provides the following answers to frequently asked closing cost questions for buyers.

When are closing costs paid in New Jersey?

Most closing costs are paid on the date of closing. However, some (such as inspection fees or application fees) may be paid upfront, depending upon the scenario.

Can I add closing costs to my home financing?

Sometimes. Certain lenders will allow buyers to roll some of their closing costs into the home loan, but that often comes with a tradeoff, such as a higher interest rate, to consider. Talking to a mortgage expert will be the best way to assess all of your options in terms of loan products available.

Will I need to pay private mortgage insurance (PMI) in New Jersey?

Private mortgage insurance (PMI) is typically required when you obtain a conventional mortgage and make a down payment that’s less than 20% of the home’s purchase price. A conventional mortgage is any mortgage that’s not part of a government loan program. This means FHA and VA loans are not conventional mortgages, as they are insured by government programs.

Conclusion: Plan wisely for closing costs in New Jersey

Closing costs in New Jersey represent a significant expense, so it’s important to be well-informed before making an offer on a house. Partner with a trusted buyer’s agent in New Jersey who can help guide you through closing cost expectations ahead of time.

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