Some states pile on significantly higher closing costs due to transfer taxes, mandatory attorney involvement, and title insurance requirements. If you are buying in one of these states, budgeting extra for closing day is essential. Here are the states ranked from highest to lowest closing cost percentage.
Closing costs are driven by a mix of state-mandated fees, transfer taxes, title insurance requirements, attorney mandates, and recording fees. States that require attorney involvement at closing or impose high transfer tax rates consistently rank at the top for closing costs. In states with no transfer tax and streamlined title processes, buyers can close for under $3,000.
Budgeting for closing costs is critical because this cash is due on top of your down payment. On a $350,000 home, the difference between a 0.9% and 3.3% closing cost rate is over $8,400 — money that could otherwise go toward your down payment, rate buy-down, or emergency reserves. Some lenders offer "no-closing-cost" mortgages that roll fees into a higher interest rate, but this increases your total cost over the life of the loan.
Negotiating with sellers for closing cost credits, comparing lender fees via Loan Estimates, and choosing a state with lower baseline costs are the most effective ways to minimize what you pay at the closing table.
| Rank | State | Closing Cost % | Median Price |
|---|---|---|---|
| #1 | Delaware | 3.3% | $355,000 |
| #2 | New York | 2.8% | $430,000 |
| #3 | Maryland | 2.5% | $420,000 |
| #4 | Connecticut | 2.1% | $405,000 |
| #5 | Illinois | 2% | $270,000 |
| ... | |||
| #46 | North Dakota | 1.1% | $255,000 |
| #47 | Wyoming | 1.1% | $340,000 |
| #48 | Iowa | 1% | $210,000 |
| #49 | Missouri | 0.9% | $235,000 |
| #50 | South Dakota | 0.7% | $295,000 |
Delaware has the highest average closing costs at 3.3% of the home price.
Closing costs typically include loan origination fees, appraisal, title search and insurance, recording fees, attorney fees (where required), transfer taxes, prepaid property taxes and insurance, and escrow deposits. The mix and total vary significantly by state.
Yes, several closing costs are negotiable. You can shop for title insurance and settlement services, negotiate lender fees by comparing Loan Estimates from multiple lenders, and ask the seller to contribute toward closing costs as part of your purchase offer.
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