Who Pays What at an Atlanta Real Estate Closing?

Who pays what at closing?

The answer is not always as straightforward as people expect.

Some expenses are typically associated with the buyer. Others are usually charged to the seller. Several can be negotiated. And some depend entirely on whether the buyer is financing the purchase, whether the property is a condominium, what the contract says, and what expenses have already been paid during the transaction.

In Georgia, the closing process also has an important difference from many other states: a Georgia attorney oversees the real estate closing process.

If you are buying or selling a home in Atlanta, understanding the likely expenses before you reach the closing table can help prevent surprises.

Here is a practical breakdown of who commonly pays which expenses in an Atlanta real estate transaction.

Browse Atlanta homes and condos for sale, visit our Real Estate 101 resources, or contact The Agency Atlanta Intown for help planning your next purchase or sale.

First: Closing Costs Are Not All the Same

The phrase "closing costs" is often used as though it describes one single expense.

In reality, closing costs are a collection of charges connected with transferring ownership and, when applicable, obtaining a mortgage.

Depending on the transaction, they may include:

• Closing attorney fees
• Lender fees
• Loan-related taxes
• Title insurance
• Recording fees
• Real estate transfer tax
• Property tax prorations
• HOA or condominium charges
• Prepaid insurance
• Prepaid interest
• Escrow deposits
• Broker compensation
• Seller loan payoff expenses

Some of these are true transaction costs. Others are prorations or prepaid expenses that adjust for who owes what as of the closing date.

What Does the Buyer Usually Pay?

A financed buyer typically has more individual line items at closing than a cash buyer because mortgage financing creates additional costs.

Depending on the transaction and loan program, buyer expenses may include:

• Loan origination or lender fees
• Appraisal-related charges
• Credit-report or underwriting charges
• Intangible recording tax
• Security deed recording fees
• Lender's title insurance
• Owner's title insurance if the buyer elects or agrees to purchase it
• Closing attorney charges allocated to the buyer
• Prepaid homeowners insurance
• Prepaid mortgage interest
• Initial escrow deposits for taxes and insurance
• HOA or condominium charges assigned to the buyer

The exact amount can vary substantially depending on the lender, purchase price, loan amount, type of property, closing date, and negotiated contract terms.

What Does the Seller Usually Pay?

Seller expenses typically relate more to transferring title, paying off existing obligations, and completing the terms of the sale.

Depending on the transaction, those expenses may include:

• Existing mortgage payoff
• Loan payoff or release charges
• Georgia real estate transfer tax unless otherwise allocated by the contract
• Closing attorney expenses allocated to the seller
• Broker compensation agreed to by the seller
• Buyer broker compensation if the seller has contractually agreed to pay it
• Property tax prorations
• HOA or condominium fees owed through closing
• HOA transfer, statement, or disclosure fees when applicable
• Special assessments if the contract assigns them to the seller
• Seller concessions negotiated in the purchase agreement

The seller's largest deduction from proceeds is often the payoff of any mortgage or other liens secured by the property.

Georgia Real Estate Transfer Tax

Georgia imposes a real estate transfer tax when real property is conveyed.

The Georgia Department of Revenue states that the seller is liable for the tax, although the parties can agree in the sales contract that the buyer will pay it instead.

The tax is calculated at:

• $1 for the first $1,000 or fractional part of $1,000 of consideration, and
• 10 cents for each additional $100 or fractional part of $100.

In practical terms, this works out to approximately $1 per $1,000 of the sale price.

For example, on a $500,000 sale, the transfer tax would generally be about $500, subject to the applicable calculation and any relevant exemptions.

What Is Georgia's Intangible Recording Tax?

Buyers obtaining certain long-term mortgage financing in Georgia may encounter another state tax called the intangible recording tax.

This is connected to recording a long-term note secured by Georgia real estate.

The Georgia Department of Revenue states that the tax is calculated at $1.50 for each $500, or fractional part of $500, of the face amount of the note.

The maximum tax on a single note is $25,000.

The tax is technically collected in connection with the lender's security instrument, but the lender may pass that expense on to the borrower.

For that reason, buyers using mortgage financing commonly see the intangible recording tax among their loan-related closing costs.

Cash Buyers Avoid Many Loan-Related Costs

A cash buyer still has closing expenses, but the list is generally shorter because there is no mortgage.

A cash buyer typically avoids costs associated with:

• Loan origination
• Underwriting
• Lender-required appraisal
• Mortgage recording
• Intangible recording tax associated with a mortgage note
• Lender's title insurance
• Prepaid mortgage interest
• Lender escrow deposits

Cash buyers may still pay attorney fees, owner's title insurance, recording charges, HOA-related charges, and other transaction expenses.

Who Pays the Closing Attorney?

Georgia real estate closings are overseen by an attorney.

The attorney's responsibilities can include reviewing title, preparing closing documents, coordinating funds, overseeing execution of conveyance documents, and recording appropriate documents after closing.

Who pays the attorney fee can depend on the contract and transaction.

Rather than assuming that the buyer or seller automatically pays every attorney charge, review the closing statement and contract allocation.

The important point is that the closing attorney represents an essential part of the Georgia closing process.

What Does Title Work Include?

Before ownership transfers, title is reviewed to identify matters that may affect the property.

These can include:

• Existing mortgages
• Liens
• Judgments
• Unpaid taxes
• Easements
• Ownership issues
• Other recorded claims

The seller generally must be able to convey the quality of title required by the contract.

If an existing mortgage is secured by the property, the closing attorney typically obtains payoff information so the loan can be satisfied from the seller's proceeds.

What Is Owner's Title Insurance?

Owner's title insurance is designed to protect the purchaser's ownership interest against certain covered title problems that existed before the policy was issued.

Examples can include certain undiscovered liens, errors in public records, or other covered defects in title.

Owner's title insurance is different from lender's title insurance.

Lender's title insurance protects the lender's interest in the property.

Owner's title insurance protects the homeowner's covered ownership interest.

How the owner's policy is paid for can depend on the contract and transaction structure.

Property Taxes Are Usually Prorated

Property taxes create one of the most misunderstood items on a closing statement.

Real estate taxes apply to a period of ownership, but the property may change owners partway through that tax period.

Closing statements therefore commonly include a tax proration so the financial burden is divided according to the parties' respective ownership periods and the terms of the contract.

Depending on whether the current tax bill has already been paid, the adjustment may appear as a credit or debit.

This is why a tax line on a closing statement does not necessarily mean one party is paying the entire year's taxes.

What About Homestead Exemption?

A buyer who intends to use the property as a primary residence should investigate the applicable homestead exemption rules after purchasing.

Homestead exemptions generally are not automatically transferred from seller to buyer.

Eligibility, filing deadlines, and the available exemptions can vary based on the property's jurisdiction and the owner's circumstances.

Buyers should verify the applicable requirements with the appropriate county or local tax authority rather than assuming the seller's current tax bill will remain unchanged.

Related reading: Understanding Property Taxes in Atlanta

Who Pays HOA Fees at Closing?

If the property belongs to a homeowners or condominium association, the closing may contain several HOA-related adjustments.

Possible charges include:

• Regular monthly assessments
• Past-due assessments
• Transfer fees
• Move-in or move-out fees
• Statement or closing-letter fees
• Capital contribution fees
• Special assessments

Which party pays each charge depends on the governing documents, the association's policies, and the purchase contract.

Condo Buyers Should Pay Particular Attention

For an Atlanta condo purchase, association expenses deserve careful review before closing.

A buyer should know:

• The regular HOA fee
• Whether assessments are current
• Whether a special assessment exists
• Whether another assessment is being considered
• Whether the association charges move or transfer fees
• Whether a buyer capital contribution is required

These items can affect both the amount needed at closing and the buyer's ongoing cost of ownership.

Related reading: What Buyers Need to Know About HOA Fees

What Happens to an Existing Special Assessment?

If a condominium or HOA has an outstanding special assessment, do not assume automatically that either the seller or buyer must pay it.

The answer can depend on:

• When the assessment was approved
• When payments are due
• Whether it has already been paid
• The association's documents
• The purchase contract

This is one reason special assessments should be identified during due diligence rather than discovered at the closing table.

Who Pays the Real Estate Agents?

Real estate broker compensation is governed by the applicable brokerage agreements and transaction documents.

There is not one universal Atlanta commission rate or mandatory compensation arrangement.

A seller may agree to compensate the seller's brokerage under a listing agreement.

A buyer may have compensation obligations under a buyer brokerage agreement.

The transaction may also contain an agreement for the seller or another party to pay some or all of a buyer broker's compensation.

The important point is that broker compensation should be understood from the specific agreements involved in the transaction rather than treated as an automatic or fixed closing cost.

What Are Seller Concessions?

A seller concession occurs when the seller agrees to contribute toward certain buyer expenses.

Depending on the loan program, contract, and lender rules, that contribution may potentially be used toward eligible closing costs.

For example, a buyer might negotiate a purchase in which the seller contributes a certain dollar amount toward allowable buyer closing costs.

This can reduce the buyer's cash needed at closing.

But it does not necessarily mean the buyer is purchasing the property for less.

Price Reduction vs Closing-Cost Contribution

These two negotiations affect buyers differently.

A $10,000 price reduction lowers the purchase price.

A $10,000 seller contribution toward eligible closing costs may reduce the buyer's immediate cash requirement.

For a financed buyer, the second option can sometimes have greater short-term value because reducing the purchase price by $10,000 generally does not reduce the cash requirement by the entire $10,000.

Which structure is more useful depends on the buyer's finances, loan program, appraisal, contract, and lender limitations.

What Are Prepaid Expenses?

Some amounts collected at closing are often described as closing costs even though they are really payments for future or upcoming expenses.

These may include:

• Homeowners insurance premiums
• Mortgage interest
• Property tax escrow deposits
• Insurance escrow deposits

For financed purchases, the lender may require the borrower to fund an escrow account at closing.

That money remains associated with future tax or insurance obligations rather than functioning as a fee paid to the lender.

Why the Closing Date Can Affect Buyer Costs

The day of the month you close can influence certain prepaid expenses.

For example, mortgage interest is commonly collected for the period between closing and the beginning of the next applicable payment cycle.

That means a closing early in the month can have a different prepaid-interest amount from a closing late in the month.

This does not necessarily make one date better than another, but it can affect the amount of cash needed at closing.

What Happens to the Seller's Mortgage?

If the seller has a mortgage, it usually must be paid off as part of the closing.

The closing attorney obtains a payoff figure from the lender.

The payoff may include:

• Remaining principal balance
• Accrued interest
• Applicable lender charges
• Other amounts required by the payoff statement

The mortgage payoff is deducted from the seller's proceeds.

If the seller has multiple liens against the property, those may also need to be addressed before the seller can receive the remaining proceeds.

Seller Proceeds Are Not the Same as the Sale Price

A seller who accepts a $700,000 offer does not receive a $700,000 check at closing.

The sale price is reduced by the seller's applicable obligations and charges.

A simplified calculation might look like:

Sale Price
minus mortgage payoff
minus agreed broker compensation
minus applicable transfer tax
minus attorney or transaction charges
minus tax and HOA adjustments
minus seller concessions
= Estimated Net Proceeds

This is why sellers should request a net sheet when evaluating an offer.

Buyers Should Think in Terms of Cash to Close

Buyers should make a similar distinction.

The down payment is not necessarily the entire amount needed at closing.

A financed buyer's cash requirement may include:

• Down payment
• Closing costs
• Prepaid expenses
• Escrow deposits
• Other transaction charges

Credits already paid or deposited during the transaction can reduce the remaining amount due.

What Happens to Earnest Money?

Earnest money is generally not an additional expense on top of the purchase price.

Assuming the transaction closes and the deposit is properly credited under the contract, earnest money is typically shown as a credit toward the buyer's obligations at closing.

For example, if a buyer has already deposited $10,000 in earnest money, that amount can reduce the remaining cash the buyer needs to bring to closing.

Related reading: What Does Earnest Money Mean in Georgia?

What About the Due Diligence Fee?

Georgia purchase contracts can be structured in different ways, so buyers should review their specific agreement carefully.

Any fee, payment, or credit associated with due diligence should be handled according to the actual contract terms rather than assumed to function the same way as earnest money.

Does the Buyer Pay for the Home Inspection?

Home inspection fees are commonly buyer expenses paid before closing.

Because the inspection normally takes place during the transaction rather than at the closing itself, buyers may forget to include it when estimating the total cost of purchasing a home.

Other pre-closing buyer expenses can include specialized inspections or evaluations chosen by the buyer.

Related reading: What Is a Home Inspection and What It Covers

Who Pays for the Appraisal?

When financing requires an appraisal, the appraisal cost is generally associated with the buyer's loan.

The buyer may pay for it before closing or the cost may appear among the loan charges, depending on the lender's process.

Cash buyers can choose whether they want an appraisal unless the contract or another circumstance requires one.

Related reading: How Appraisals Work in Atlanta Home Sales

What About Repairs Agreed to During Due Diligence?

Repairs are different from conventional closing costs.

If the seller agrees to complete repairs before closing, the seller ordinarily pays for those repairs according to the amendment or agreement between the parties.

In other transactions, buyer and seller may negotiate a credit or another solution instead of having work completed before closing.

The structure should be clearly documented and, if the buyer is financing, acceptable to the lender.

A Simplified Buyer vs Seller Closing Cost Breakdown

Buyer Often Pays or Funds:

• Down payment
• Loan and lender fees
• Mortgage-related appraisal
• Intangible recording tax when passed through by the lender
• Security deed recording charges
• Lender's title insurance
• Owner's title insurance if assigned to buyer
• Buyer-side attorney charges if applicable
• Prepaid insurance
• Prepaid interest
• Initial escrow deposits
• Buyer brokerage compensation not otherwise paid under the transaction
• Applicable HOA buyer charges

Seller Often Pays or Funds:

• Mortgage and lien payoffs
• Georgia real estate transfer tax unless contractually shifted
• Seller-side attorney or transaction charges if applicable
• Seller brokerage compensation
• Buyer brokerage compensation the seller has specifically agreed to pay
• Applicable property tax adjustments
• Seller HOA obligations
• Negotiated seller concessions
• Other seller obligations required by the contract

May Be Negotiated or Vary by Transaction:

• Owner's title insurance
• Closing attorney charges
• Buyer closing-cost contributions
• HOA transfer-related fees
• Special assessments
• Buyer broker compensation
• Repairs or repair credits
• Other contract-specific expenses

Do Closing Costs Change With a Condo Purchase?

The core closing process is similar, but condominium transactions can introduce additional expenses and considerations.

These may include:

• Association closing letters
• Transfer fees
• Move-in fees
• Elevator deposits
• Capital contributions
• Special assessments

Buyers should also review the association's financial health, insurance, reserves, rental rules, and governing documents before purchasing.

Related reading: How to Read Condo Financial Statements Before Buying

Closing Costs Should Be Considered Before Making an Offer

A buyer should not wait until the week of closing to think about closing expenses.

Understanding the likely cash requirement before making an offer can influence:

• Down payment strategy
• Loan selection
• Seller-concession requests
• Closing date
• Offer structure

Likewise, sellers should evaluate estimated net proceeds rather than focusing only on the headline offer price.

A Higher Offer Is Not Always the Better Net Offer

Consider two hypothetical offers.

Offer A has a higher purchase price but requests a substantial seller closing-cost contribution.

Offer B has a slightly lower purchase price but asks for no contribution.

The higher offer may or may not produce greater seller proceeds.

The seller should compare the economics of the complete offer, including concessions, financing, contingencies, closing date, and other terms.

Review the Numbers Before Closing Day

Neither buyers nor sellers should see their closing figures for the first time while signing documents.

Financed buyers generally receive lender disclosures showing loan terms and closing expenses.

The closing attorney also prepares the transaction's final settlement figures.

Review the numbers carefully and ask questions about anything that does not match your understanding of the contract.

Watch for Wire Fraud

Real estate transactions involve large wire transfers and are common targets for fraud attempts.

Buyers and sellers should treat emailed wiring instructions with extreme caution.

Before sending money:

• Confirm wiring instructions directly with the closing firm using independently verified contact information.
• Do not rely solely on an email announcing changed wiring instructions.
• Verify account information through the closing attorney's established procedures.

A fraudulent wire can be extremely difficult to recover once sent.

10 Questions Buyers Should Ask Before Closing

1. What is my estimated total cash to close?
2. Which expenses are lender charges?
3. How much am I paying in prepaid taxes and insurance?
4. How is my earnest money being credited?
5. Am I paying for owner's title insurance?
6. Are there HOA or condo transfer charges?
7. Is there a capital contribution or move-in fee?
8. How are property taxes being prorated?
9. Is the seller contributing toward my closing costs?
10. How and when should I safely deliver closing funds?

10 Questions Sellers Should Ask Before Closing

1. What is my estimated net proceeds amount?
2. What is my mortgage payoff?
3. What broker compensation am I responsible for under my agreements?
4. Did I agree to pay any buyer broker compensation?
5. Did I agree to contribute toward buyer closing costs?
6. How are property taxes being prorated?
7. Are there HOA transfer or closing fees?
8. Are any special assessments due?
9. Are there liens or other title matters that must be paid?
10. How will my proceeds be delivered securely?

Final Thoughts

There is no universal rule that says the buyer pays all closing costs or that the seller pays a predetermined percentage.

An Atlanta real estate closing is made up of multiple expenses, credits, prorations, loan charges, taxes, association charges, and negotiated obligations.

Buyers commonly have mortgage-related costs, prepaid expenses, escrow deposits, recording charges, and certain title expenses.

Sellers commonly have mortgage payoffs, transfer-related expenses, agreed broker compensation, tax adjustments, and any concessions they negotiated in the contract.

But the purchase agreement ultimately matters.

Understanding the economics before making or accepting an offer allows both sides to negotiate more intelligently and reduces the likelihood of surprises near closing.

If you're buying or selling in Atlanta, contact The Agency Atlanta Intown. Our team can help you understand the financial structure of an offer, estimate likely buyer costs or seller proceeds, and coordinate with your lender and closing attorney throughout the transaction.

This article is provided for general informational purposes and is not legal, tax, lending, accounting, or financial advice. Closing expenses, taxes, lender requirements, brokerage compensation, association charges, and contract terms vary by transaction. Buyers and sellers should review their specific agreement, lender disclosures, and closing statement and consult their closing attorney, lender, tax professional, or other appropriate advisor regarding their individual circumstances.