Closing costs in New Jersey: what buyers and sellers pay

Why costs differ so much

Only a few lines of a New Jersey closing are set by a government body. The Realty Transfer Fee and the Graduated Percent Fee are set by State law. Title insurance rates must receive State approval before a company uses them: the Department of Banking and Insurance (DOBI) says title insurers file their rates, rules and forms on a prior-approval basis. Everything else, such as lender charges, inspections, a survey and attorney fees, is set by the provider.

I could not read a current official rate manual for title insurance, so this page gives no premium figure. Ask your title agent for the premium and for the filed rate it comes from.

Two federal forms show your exact numbers. The lender must give you a Loan Estimate within three business days of receiving your application, and you must receive the Closing Disclosure at least three business days before you close (Consumer Financial Protection Bureau). Note that DOBI’s guide still uses the older term “Good Faith Estimate”; the forms you will receive are the Loan Estimate and Closing Disclosure.

What the buyer pays

DOBI’s guide says one-time closing costs “can include loan application fees, credit report fees, appraisal fees, commitment fees, lock-in fees, inspection fees, title insurance and a survey fee,” and advises buyers to anticipate about 3 to 4 percent of the total sale price. It also describes these items:

• Title insurance. In essentially all financed purchases the lender requires it. It is a one-time fee paid at closing and protects you and the lender up to the purchase price if the title proves invalid.
• Escrow deposits. Lenders often require several months of payments toward property taxes and insurance at closing. See escrow accounts.
• Points. One point is usually 1% of the loan amount, and DOBI says points may be negotiable.
• Inspections and certifications. The guide lists termite inspection, land survey, well testing, septic certification, flood search, radon testing, smoke detector certification and a certificate of occupancy as items that may be required, depending on the property. See home inspection cost and land survey cost.
• Homeowner’s insurance. Your lender will not let you close without it, and you must show a paid receipt at settlement.

What the seller pays

• Realty Transfer Fee. The State imposes it on the seller, calculated on the consideration in the deed. The full schedule and exemptions are on our transfer tax page.
• Graduated Percent Fee. For deeds submitted for recording on or after July 10, 2025, the seller, not the buyer, owes 1% to 3.5% of the whole price when it is above $1 million (Division of Taxation memorandum of July 2, 2025).
• Brokerage compensation. Not set by any statute I read; see real estate commission.
• Payoff of the existing mortgage, prorated property taxes and the seller’s own attorney. Amounts depend on the loan, the tax bill and the closing date.

Attorneys and the closing

DOBI states that hiring an attorney “is not a requirement,” although many New Jersey buyers do. A contract prepared by a real estate licensee must contain the attorney review clause: buyer and seller have three business days after receiving the fully signed contract to consult an attorney, who may propose changes or void it. Most closings are held face to face with the agents, lawyers, a title clerk and the lender’s representative. DOBI warns that an attorney acting as general closing agent is usually retained by the lender or others and does not represent the buyer in a dispute. Only an attorney you retain represents you. Ask what services an attorney performs and what they cost. See real estate attorneys in New Jersey.

A worked example in Newark

This is an example, not a quote. The Division of Taxation’s 2026 statistics show an average Newark residential sale price of about $551,500, so assume a $550,000 sale.

At $1,500,000 the seller would owe $15,625 in Realty Transfer Fee plus $15,000 in Graduated Percent Fee. For Newark context see Newark.