You’ve found the right home, signed the purchase agreement, and your loan has been approved. But just when you’re ready to celebrate, another number hits your inbox: your closing costs. Whether you're buying or selling a home in Indiana, understanding closing costs is critical to avoiding surprises—and setting yourself up for a smooth closing.
This guide breaks down what closing costs are, how much you should budget for, and how Lockstep Realty—brokered by eXp Realty—helps buyers and sellers in Indiana navigate them confidently.
What Are Closing Costs and Who Pays Them?
Closing costs are the collection of fees and charges that come due at the end of a real estate transaction. These include payments to your lender, title company, local government, and sometimes third-party service providers. In Indiana, closing costs are typically split between buyer and seller, but the exact distribution can vary based on negotiations, lender requirements, and local practices.
Think of them as the “transactional fine print” of buying or selling a home—critical, but often overlooked.
Typical Buyer Closing Costs in Indiana
Buyers in Indiana can expect to pay between 2% and 5% of the purchase price in closing costs. These are typically due upfront and cannot be rolled into the loan (unless using specific financing structures).
Loan-Related Fees
Origination fee: Paid to your lender for processing the loan (often 0.5%–1% of loan amount)
Appraisal: Required by your lender to confirm home value (typically $400–$600)
Credit report: Charged by lender to assess your creditworthiness
Underwriting/processing fees: Administrative costs associated with final loan approval
Title & Escrow Charges
Lender’s title insurance: Protects the lender in case of title issues
Title search fee: Ensures the home is free of liens or ownership disputes
Closing/escrow fee: Charged by the title company to manage funds and paperwork
Prepaid Costs
Homeowner’s insurance: Typically paid in full for the first year at closing
Property taxes: Prorated from the day you take ownership
Escrow account funding: Lenders may require a few months’ reserves for taxes and insurance
Recording & Miscellaneous Fees
Deed and mortgage recording: Paid to the county to make ownership official
Courier or wire fees: For document handling and fund transfers
HOA transfer fee (if applicable): Paid when ownership changes in an HOA neighborhood
Typical Seller Closing Costs in Indiana
Sellers usually pay higher total closing costs due to real estate agent commissions and the title policy. On average, sellers in Indiana should expect 6%–8% of the sale price to go toward closing costs.
Commission
Listing agent and buyer’s agent: Typically 6% total, split evenly
Paid from proceeds at closing and negotiated when listing the home
Title-Related Fees
Owner’s title insurance: Covers the buyer if title issues arise (customarily paid by seller in Indiana)
Title search and clearing: Ensures the seller has clean ownership
Property-Related Costs
Prorated property taxes: Paid up to the closing date
HOA dues or transfer fees: Paid if applicable
Home warranty (if offered): Sometimes included to make the listing more attractive
Repairs or inspection concessions: Based on buyer negotiations during the due diligence period
Sample Breakdown for a $300,000 Home
Buyer (Estimated 3%):
Loan origination: $1,500
Appraisal: $500
Title fees: $1,200
Insurance & prepaids: $3,000
Total: ~$6,200
Seller (Estimated 7%):
Commission: $18,000
Title insurance: $1,200
Taxes and HOA: $1,800
Total: ~$21,000
These estimates can vary widely depending on the terms of your deal, service providers, and property specifics.
Can Buyers Negotiate Closing Costs?
Absolutely. Many buyers—especially first-time homeowners using FHA or VA loans—ask sellers to contribute toward closing costs. This is known as a seller concession, and it’s a common negotiating tool in Indiana.
However, there are limits:
Conventional loans: Up to 3%–6% of the loan amount depending on down payment
FHA loans: Up to 6%
VA loans: Seller can pay all reasonable costs plus up to 4% in concessions
Your Lockstep Realty agent will guide you on how and when to request concessions based on market conditions.
Can You Roll Closing Costs into the Mortgage?
Sometimes. If you're refinancing, many lenders allow closing costs to be rolled into the loan balance. For purchases, the option is less common, though you can sometimes choose a slightly higher interest rate in exchange for “lender credits” that offset costs upfront.
How Lockstep Realty Helps You Navigate Closing Costs
At Lockstep Realty, we know that closing costs can feel like the fine print of real estate—but we treat them like mission-critical details. Here’s how we support clients:
Transparent cost estimates at the beginning of the process
Pre-negotiation strategy to include or offset buyer costs
Net sheets for sellers to see estimated proceeds before listing
Vendor coordination with lenders, title companies, and HOAs
Explaining closing disclosures line by line so you know exactly what you’re paying—and why
We don’t just get you to the closing table—we make sure you understand every number when you get there.
FAQs – Closing Costs in Indiana
How much are closing costs for buyers in Indiana?
Typically 2%–5% of the home’s price, depending on the loan type, property taxes, and service providers.
What’s the average for sellers?
About 6%–8%, primarily due to agent commission and title costs.
Do sellers have to pay for title insurance?
In most Indiana transactions, yes. Sellers usually pay for the owner’s title policy.
Are closing costs different by county?
Slightly. Recording fees and tax prorations vary, but the structure is generally consistent statewide.
Can closing costs be paid with a gift?
Yes, gift funds from family or approved sources are often used—especially with first-time buyer loans. Ask your lender for restrictions.
Final Thoughts – Transparency Leads to Confidence
Understanding closing costs isn’t just about math—it’s about empowerment. The more you know, the more prepared you’ll be to navigate the home stretch of your transaction without stress or surprise.
At Lockstep Realty, brokered by eXp Realty, we believe informed clients make better decisions—and our job is to make sure you’re informed every step of the way.
