Sellers usually ask me about commission. Buyers usually ask me about the down payment. Almost nobody asks about closing costs first — and then it becomes the number that surprises them the most. Here's what actually shows up on a closing statement in Indiana, for both sides of the table, so nothing on closing day is a surprise.
What Buyers Pay
Most buyers in Indiana should budget 2% to 5% of the purchase price in closing costs, on top of the down payment. On a $280,000 home, that's roughly $5,600 to $14,000.
This covers three categories:
- Lender fees — loan origination, underwriting, and credit report charges
- Third-party fees — appraisal, home inspection, and the lender's title insurance policy
- Prepaids — homeowners insurance, prepaid interest, and the first deposit into your property tax escrow account
Your mortgage calculator can give you a rough monthly payment, but it won't show these one-time costs — that's a separate conversation I have with every buyer before we write an offer. If you're a veteran or active-duty buyer, note that VA loans waive several of these fees entirely, which is one of several reasons the Military on the Move® program can meaningfully lower this number.
What Sellers Pay
Sellers carry more of the closing cost burden in Indiana, mainly because commission is typically paid out of sale proceeds. Excluding commission, sellers typically pay about 2.7% to 2.8% of the sale price in closing costs — the owner's title insurance policy, recording fees, and prorated property taxes. Once real estate commission is added in, that figure commonly lands between 6% and 10% of the sale price total.
If you want to know what your specific number looks like before you list, that's exactly what I walk through in your free home valuation — a real number, not a rough guess.
The Indiana-Specific Details That Change the Math
A few things make Indiana's closing cost picture a little different from other states:
No state transfer tax. Indiana does not impose a state-level real estate transfer tax, which keeps overall closing costs lower here than in many other states. Some cities or counties may still charge their own, so it's worth confirming for your specific property.
Recording fees are fixed by statute. Under Indiana Code 36-2-7-10, county recorders charge a flat $25 to record a deed and $55 to record a mortgage in every county except Marion County, which charges slightly more. It's a small line item, but it's one of the few closing costs that's set in state law rather than negotiated.
Property taxes are paid in arrears. Indiana bills property taxes for the prior year, so sellers almost always owe buyers a prorated tax credit at closing to cover the months they owned the home but haven't yet been billed for. This is one of the most common places sellers get caught off guard, and it's worth understanding before you ever sign a listing agreement.
Title insurance is usually split by policy type. Sellers typically pay for the buyer's owner's title policy, while buyers typically pay for their lender's title policy — two separate protections covering two separate parties.
Where Pricing and Closing Costs Meet
Closing costs aren't just paperwork — they're part of the negotiation. In a market where correctly priced homes are still moving quickly, a well-timed seller concession toward buyer closing costs can be the difference that gets an offer signed instead of a buyer walking to the next listing. And if a low appraisal ever puts that number in question mid-transaction, here's exactly how that gets resolved.
Have Questions Specific to Your Situation?
Every transaction is a little different — loan type, county, and negotiated concessions all move these numbers. My West Central Indiana real estate FAQ covers more of the buying and selling questions I hear most often across Montgomery County and the surrounding area.
If you'd rather just talk it through, that's what I'm here for.
Call or text me at 765-230-6335, or reach out for a confidential consultation.
