Selling a Home in Arizona? Here are the Closing Costs You’ll Pay

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Arizona home sellers hoping to exchange the front door keys for a net gain on the sale should be aware that there are several closing items they’ll be responsible for, even as a hot seller’s market rocks the Sun Belt state. A growing population and economy has made Arizona a magnet for newcomers and deep-pocketed investors, but whether you’re selling in Tempe or Tucson, there are some closing expenses you can’t avoid.

Arizona real estate agent, James Wexler, who has represented clients on 420 single-family home transactions, says that sellers can get a preview of what they’ll owe by requesting a net sheet, otherwise known as a settlement estimate from their title and escrow company at the start of the process.

“Most people don’t really concern themselves with the sell-side costs,” Wexler says.

This is partly due to the fact that closing costs have dropped a bit for both Arizona sellers and buyers in recent years. Wexler explains that a competitive real estate market in the state has led to a compression of costs for items like escrow, lender and agent fees.

According to Wexler, the average amount of costs Arizona sellers typically pay at closing is 6%, broken down into 5% for the agent commission and 1% for the remaining fees. Even if you think you have a rough sense of what you’ll owe, it’s advisable to peruse all the items, so there are no surprises at closing time.

Closing Cost Average Cost  Seller Responsibility
Mortgage Payoff Varies by loan amount Only if applicable
Property Taxes $1,356 annually for a $450K median home price Customary
Loan Reconveyance Fee $50 to $65 Only if applicable
Reconveyance Recording Fee $30 per document Only if applicable
Transfer Fee $2 Customary
Agent Commission $22,500 for a $450K median home price Customary
Title Guarantee $75-$200 for title search; $1,400-$4,000 for insurance Customary
Escrow Fee $750 Customary
Concessions Varies by transaction Negotiable
Home Warranty $300-$600 Negotiable
HOA Fee Disclosure fee up to $400; transfer fee $225-$250 Only if applicable
Attorney Fees Varies Only if applicable
A tablet used by someone who needs to pay closing costs in Arizona.
Source: (Surface / Unsplash)

Arizona sellers will cover these closing costs

Although there’s room for negotiations between buyers and sellers for some closing costs, sellers can’t avoid responsibility for the following:

1. Mortgage payoff

Though highly variable, one of the biggest ticket expenses for sellers at closing is the mortgage balance payoff. Nationally, the median length of homeownership in the U.S. was about 13.3 years as of 2019, meaning that there would still be a ways to go in terms of paying off a 30-year mortgage for many sellers. In Arizona cities like Gilbert and Surprise, the duration tends to be much shorter at 8.6 and 8.8 years, respectively.

With such a large proportion of home sellers still in the midst of long home loan terms, chances are you’ll have to pay the remainder of your mortgage at closing. Be sure to refer to your net sheet for the amount you’ll owe and plan finances accordingly. The goal, of course, is to sell your home for higher than your remaining mortgage balance, so you’ll have some cash in hand at the end of the transaction.

2. Property taxes

Another closing expense you won’t be spared as a seller is taxes. In Arizona, property taxes are determined by the assessed value, not the purchase price, which is established by the assessor for a given county every two years.

“It doesn’t go up very much per year,” Wexler explains. “We have very stable rates.”

Arizona property taxes are paid twice per year in advance. For sellers, this means you’ll likely pay at least a portion of that six-month tax share and then you may get a credit back depending on the timing of the cycle. Buyers and sellers don’t negotiate tax payments in Arizona, Wexler says.

On average, the state’s property taxes are about 0.72% of the home’s value, though it varies by county. The median annual property tax payment for an Arizona home is $1,356 for a home with the median assessed value of $187,700.

3. Loan reconveyance fee

To complete your mortgage payoff you’ll need to pay for a reconveyance deed to furnish proof that the loan was paid off and your lender no longer has a claim to the property. The lender will generally charge a reconveyance fee of between $50 to $65 for the documentation.

4. Reconveyance recording fee

This item shouldn’t break the bank but it’s an essential expense to pay in order to get the county to file the reconveyance deed in its records. The fee varies by Arizona county. For example, in Maricopa County there’s a flat recording fee of $30 per document.

5. Transfer fee

In Arizona, sellers are off the hook for the transfer tax levied in many other states. Also known as doc stamps, the tax is generally imposed on the seller and can add a couple thousand extra dollars to your closing bill. However, in 2008 Arizona voters amended the Constitution to do away with the transfer tax, becoming one of 13 states that lacks the tax item. Instead sellers have to pay a paltry $2 flat transfer fee for the transaction.

6. Real estate agent commission

It’s abundantly common for home sellers to work with a real estate agent, with 89% choosing to do so in the U.S. in 2020. In Arizona, the average agent commission is 5%, ranging from 4% to 6%, Wexler says, and is split equally between the buyer’s agent and the seller’s agent.

With the median single-family home price in Arizona at $450,000 — up from $350,000 last year — calculated at 5%, sellers can expect to pay about $22,500 for the commission. For a closer approximation of what you’ll pay based on your location, use our handy commission calculator.

Although Wexler says the average commission rate has dropped a bit due to heightened market competition, it’s still one of the more significant closing costs for sellers. However, shopping around for an agent with the lowest fee isn’t always advisable. Hiring an experienced agent is one of the most important steps in selling your home and can help you seal the deal at a higher sale price.

Also consider that the top 5% of real estate agents sell homes for as much as 10% more than the average agent.

7. Title guarantee

In order to determine a property’s history, such as whether a third-party may have an ownership claim or there’s an issue such as a lien from past unpaid home improvement projects or unpaid taxes, a title company will perform a title search to determine that your home is clear for a sale to take place.

While the search fee only costs on average between $75 and $200, sellers are also generally on the hook for paying for the title policy, which Wexler says can run between $1,400 to $4,000 depending on the age of the house and the purchase price.

While owner’s title insurance isn’t mandatory in Arizona, it’s customary and strongly advised as it protects a homeowner’s claim on their property should any third-party claims arise after closing.

8. Escrow fee

The escrow fee, also referred to as the settlement fee, isn’t an expense that sellers can completely avoid, although Wexler explains that buyers and sellers will usually split the bill equally. The fee is paid at the end of the escrow period when all the final documents are signed and the transfer of the property takes place. In order for everything to be finalized, the fee must be paid and, according to Wexler, typically runs about $1,500. Since it’s split 50/50, the seller would be responsible for about $750.

A condo in Arizona that has closing costs.
Source: (iStrfry , Marcus / Unsplash)

Sellers may also cover these closing costs

We’re now out of the realm of standard closing costs for sellers and into the arena of costs that may or may not be at play in your home sale process. The following costs may be additional items on your net sheet. While some of them vary from property to property, others are up for negotiation between buyers and sellers.

Depending on whether you’re selling your home during a buyer’s market or seller’s market could mean the difference in considerable expenses or savings on your settlement tab.

“In this market, the buyers are paying everything — it’s a true sellers market,” says Wexler. “Buyers need to expect to pay everything in terms of closing costs except for the title policy and splitting the escrow fee.”


When a property goes under a sale contract, buyers will usually have an inspection period when they can hire professionals to inspect the structure for defects, pest infestations or get a surveyor to make sure the stated boundaries of the property are accurate. During this time, the buyer can opt to cancel the contract and have their deposit refunded.

However, what often happens is that the inspection process will reveal repairs that need to be made. The buyer can either request that the seller have the repairs made or can ask for concessions in the form of a credit the seller pays in lieu of making the repairs.

For example, if the inspection reveals drainage issues on the property that may have caused water damage, the seller may add a $5,000 concession to the buyer so that a drain can be added or the grading adjusted.

Concessions are very market dependent and Wexler says that Arizona buyers aren’t getting much in the way of concessions right now. However, home sales on the higher end of the price spectrum or properties in need of significant repairs could warrant concessions from sellers.

Home warranty payment

One optional item Wexler is seeing sellers sometimes pay for is a home warranty. Even if all the necessary repairs and upgrades are made to a home prior to being put up for sale, things still go wrong in the real world. Whether a home is newly built or decades old, wear and tear are a natural progression and can be accelerated by hot, dry temperatures typical in Arizona, as well as intense precipitation during the monsoon season.

Home warranties grant buyers some protection against the unexpected, such as appliances failing or HVAC systems breaking down. A seller will sometimes pay for a yearlong home warranty policy, which generally ranges between $300 and $600.

HOA and condo dues

As there are about 9,675 HOAs in Arizona and roughly 2.22 million Arizonans live in communities governed by HOAs, there’s a fair chance that your home belongs to a homeowner’s association. If that’s the case, then be prepared to pay the association any remaining dues you owe as well as an HOA disclosure fee and transfer fee.

Disclosure fees pertain to expenses incurred by the HOA to furnish documentation to the buyer. While the disclosure fee is capped at $400, the transfer fee doesn’t come with a legal upper limit. However, transfer fees generally run between $225 and $250.

Attorney fees

“Attorneys aren’t generally used in Arizona though you’re not prevented,” says Wexler.

While it’s permissible to hire an attorney for the transaction, it’s rare in Arizona. However, instances of complex transactions or a divorce on the part of the sellers could warrant the expertise of an attorney.

Estimate your net proceeds after closing

Regardless of where your Arizona property is located, you can use HomeLight’s Net Proceeds Calculator to estimate your closing costs and, ideally, your net profit. Even if you have a rough estimate of your costs, the calculator can help you get a more exact estimate of your net proceeds so you can prepare in advance for discretionary spending or home improvement and staging.

Although Wexler meets a fair number of sellers who have a good sense of what their closing costs will be, he says that those seeking greater clarity can request a net sheet from the title and escrow company at the start of the process that will outline how much the house could sell for, the expenses you’ll incur and what you’ll have in your pocket after the sale.

Settlement statement

The final step in closing the deal is to review your settlement statement carefully. The statement shows the details of all the monetary figures associated with the transaction, including all the fees you’ve paid, credits and your net profit. Go through each line of the document to make sure everything is accurate. If something doesn’t look right, this is your chance to report any errors to your agent or title company.

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