Closing Costs in North Carolina: Who Pays What

What you'll walk away with

• The seller-paid state excise tax on deeds, and how to calculate it
• The costs buyers commonly pay
• How your due diligence fee and earnest money are credited

In this guide

• The seller-paid deed excise tax
• What buyers commonly pay
• Credits you may already have paid
• Ways to lower cash to close

Closing day in North Carolina looks a little different from other states, mostly because an attorney handles it. Here is what typically shows up, who usually pays, and where I'd double-check the numbers with your attorney and lender.

The seller-paid deed excise tax

North Carolina charges an excise tax on deeds of $1 for each $500 (or fraction of $500) of the price or value conveyed, and by statute the seller, as the transferor, pays it before the deed is recorded. On a $500,000 sale that works out to $1,000.

What buyers commonly pay

• Lender charges: origination and underwriting fees, appraisal, credit report. Your Loan Estimate and Closing Disclosure itemize them.
• Attorney and title charges: the closing attorney's fee, the title search and, where applicable, title insurance.
• Recording fees: paid to the county register of deeds to record your deed and deed of trust.
• Prepaids and escrows: items like homeowners insurance and property taxes your lender may collect up front.

Credits you may already have paid

If you negotiated a due diligence fee, it is paid directly to the seller early on, but if the sale closes it is credited toward the purchase price. Your earnest money deposit is likewise credited at closing. Both show up as credits on your closing statement.

Ways to lower cash to close

Depending on your situation and the contract, options can include negotiating seller credits, shopping lender fees, or using down payment assistance. I'll walk through the tradeoffs with you before you make an offer.

Sources: N.C.G.S. 105-228.30 (excise tax on conveyances) · NC Real Estate Commission: Due Diligence Q&A

General information, not legal, tax or financial advice. Rules and forms change; confirm current details with your closing attorney, lender and the sources linked above.

Closing-cost prep

• Request a Loan Estimate from two or three lenders and compare them
• Ask your closing attorney for an estimate of fees
• Confirm how your due diligence fee and earnest money will be credited
• Get a homeowners insurance quote
• Ask your lender what prepaids and escrows to expect
• Compare your Closing Disclosure line by line against your Loan Estimate
• Plan your cash to close and your wire-verification steps

About this guide

Joseph Ford is a licensed North Carolina real estate broker and REALTOR®, not an attorney, lender, tax professional or financial advisor. This guide is general educational information, not legal, tax, lending or investment advice, and it is not an offer or commitment to lend. Laws, forms, rates and program terms change; confirm current details with the sources linked above and with the appropriate professional. You are free to choose any lender, attorney, inspector or other provider, and I will never require you to use one I mention. Equal Housing Opportunity.