Closing Costs

Definition

Closing costs are the transaction fees, title charges, lender fees, recording fees, transfer taxes, and pro-rated property tax + insurance paid at acquisition and at sale. On a typical fix-and-flip, the buy-side closing costs run 2–4% of purchase price (lender origination, title insurance, escrow, recording, transfer tax). Sell-side closing costs run 5–7% of sale price (real estate commissions of 4–6%, transfer tax, title cure, seller concessions). The two sides together typically eat 7–11% of the project's gross value — the single biggest non-rehab cost line in the underwrite.

Worked example

A flip with $200k purchase + $480k sale. Buy-side closing at 3% of $200k = $6,000. Sell-side closing at 6% of $480k = $28,800. Total transaction costs = $34,800 — roughly equal to two months of holding costs and 7% of ARV.

How DealIntel uses it

DealIntel uses metro-specific transfer tax and commission rates to project closing costs realistically. Operators who model closing at a flat 8% across the country mis-budget materially in high-cost transfer-tax states (NY, NJ, MD, DC).

Related terms

• The 70% RuleA fix-and-flip discipline that caps the maximum allowable offer at 70% of ARV minus rehab and costs.
• Holding CostsThe total cost of owning a property during a flip — interest, taxes, insurance, utilities, and HOA — measured per month.
• After Repair Value · ARVThe estimated market value of a property after planned renovations are complete.

Matt Abadi is the founder of DealIntel. He leads the development of the platform's six-strategy underwriting engine, 25-point Kill List, and Monte-Carlo financial model — the institutional analysis stack DealIntel applies to every fix and flip deal. DealIntel was founded in 2025 with the central thesis that knowing when not to invest is the most valuable number on the page.