In Arkansas, the buyer and the seller each pay a different set of closing costs. Buyers generally cover the fees tied to the mortgage and the title work that protects their ownership, usually totaling 2% to 5% of the purchase price. Sellers generally cover the real estate agent commissions, the deed preparation, and any remaining mortgage balance, which brings their share to roughly 6% to 10%. Arkansas’s real property transfer tax of $3.30 per $1,000 of sale price is customarily split evenly between the two parties. Almost every other line item is negotiable in the purchase contract, so who pays closing costs in Arkansas ultimately depends on what the buyer and seller agree to.
On a $200,000 home, that typically works out to $4,000 to $10,000 for the buyer and $12,000 to $20,000 for the seller once commissions are included.
What the Buyer Pays
Most of the buyer’s costs come from the lender. The mortgage company charges fees for reviewing the borrower and the property, and it collects insurance premiums and prepaid items to set up the escrow account.
- Appraisal fee, typically $300 to $500 for a single-family home.
- Loan origination fee, commonly 0.5% to 1% of the loan amount, though some lenders charge a flat fee or build the cost into the interest rate.
- Credit report fee, roughly $30 to $75.
- Private mortgage insurance if the down payment on a conventional loan is less than 20%. The upfront premium or first month’s payment is collected at closing, and PMI continues until you build 20% equity in the home.1Consumer Financial Protection Bureau. What Is Private Mortgage Insurance?
- Home inspection, typically $300 to $500, plus $75 to $400 for a termite inspection if ordered.
- Owner’s title insurance, a one-time premium that protects your ownership if a title defect surfaces later. It is separate from the lender’s title policy, which protects only the bank.
- Recording fees charged by the county recorder for entering the new deed and mortgage into the public record.
- Prepaid interest covering the days between closing and the first mortgage payment, plus several months of property tax and homeowners insurance to fund the escrow account.
What the Seller Pays
Sellers have fewer line items, but their total is usually larger because of agent commissions.
- Real estate agent commissions, almost always the seller’s biggest cost. Since the 2024 changes to how commissions are structured, buyer-agent and seller-agent fees are negotiated separately rather than bundled. Total commissions now commonly range from about 4% to 6% of the sale price, depending on what each agent charges and whether the seller agrees to compensate the buyer’s agent.
- Deed preparation by an attorney or title company to produce the warranty deed that transfers ownership.
- Title search to confirm no undisclosed liens, judgments, or encumbrances exist against the property.
- Mortgage payoff. Any remaining balance on the seller’s loan is paid out of the sale proceeds at closing, along with interest accrued through the payoff date.
- Prorated property taxes. Arkansas collects property taxes in arrears, meaning the bill covers a period that has already passed. At closing, the seller credits the buyer for the portion of the tax year the seller occupied the home, so the buyer is not left paying the full bill alone when it comes due.
Out-of-State Sellers: Arkansas Income Tax Withholding
If you sell Arkansas property but live in another state, the closing agent is required to withhold Arkansas income tax from your proceeds. The current rate is 3.9%, matching the state’s top individual income tax rate.2Arkansas Department of Finance and Administration. Arkansas 2025 Individual Income Tax Instructions This is a prepayment, not an added tax. You can claim credit for the withheld amount when you file your Arkansas nonresident return.
The Real Property Transfer Tax Is Split
Arkansas charges a real property transfer tax on every deed that conveys real estate. The rate is $3.30 for every $1,000 of the actual sale price on transactions exceeding $100.3Arkansas Department of Finance and Administration. Miscellaneous Tax Descriptions On a $200,000 home, that comes to $660.
By longstanding custom, buyers and sellers split this tax equally, so each would pay $330 on that $200,000 sale. The deed cannot be recorded until the county recorder has proof the tax was paid, either through documentary stamps affixed to the deed or a compliance statement on the instrument itself.4Justia Law. Arkansas Code Title 26 Subtitle 5 Chapter 60 – Recordation of Deed
When the Transfer Tax Does Not Apply
Not every transfer triggers the tax. Arkansas exempts several categories of transactions under Ark. Code Ann. § 26-60-102, including:5Justia Law. Arkansas Code Title 26 Subtitle 5 Chapter 60 – Transfers to Which Chapter Inapplicable
- Gifts between family members, or any transfer where the total consideration is $100 or less.
- Deeds transferring property between spouses as part of a divorce, whether by agreement or court order.
- Deeds to or from the United States, the State of Arkansas, or any of their agencies or political subdivisions.
- Any deed given solely to secure a debt, such as a mortgage or deed of trust.
- Corrective deeds that only replace a previously recorded instrument on which the full tax was already paid.
- Transfers between corporations, partnerships, or LLCs, or between a business entity and its owners, when the transfer is part of an organization, merger, consolidation, or liquidation.
- Transfers of homes financed by FHA, VA, or USDA Rural Development where the sale price is $60,000 or less and the buyer has not owned a home in the past three years.
What’s Negotiable, and How Far Sellers Can Go
Outside the fixed transfer tax rate and the government-mandated recording fees, almost every closing cost in Arkansas is negotiable. The purchase contract is where buyer and seller lock in who pays what. A seller may agree to cover the buyer’s owner’s title insurance or pay a portion of the buyer’s closing costs to move the deal along or offset needed repairs.
Loan programs limit how much a seller can contribute toward the buyer’s costs:
- Conventional loans backed by Fannie Mae tie the cap to the down payment. Under 10% down, the seller can contribute up to 3% of the sale price. From 10% to 25% down, the cap is 6%. Above 25% down, it is 9%. Investment properties are capped at 2% regardless of down payment.6Fannie Mae. Interested Party Contributions (IPCs)
- FHA loans cap seller concessions at 6% of the sale price.
- VA loans do not limit seller credits toward the buyer’s actual closing costs, but seller concessions, which include items like paying off the buyer’s debts or prepaying insurance, are capped at 4% of the appraised value.7U.S. Department of Veterans Affairs. VA Funding Fee and Loan Closing Costs
If concessions exceed the program limit, the lender treats the excess as an inflated sale price, which can lower the approved loan amount or require a new appraisal.
How Closing Payments Are Made
Arkansas title companies do not accept personal checks at closing because the funds must be guaranteed. Buyers typically bring a cashier’s check or send a wire transfer to the title company’s escrow account.
Before you wire any money, confirm the instructions by calling the title company at a number you independently verify from their website or your original paperwork, not from an email. Wire fraud targeting real estate closings is a documented risk, and scammers frequently send fake instructions that mimic a title company’s branding. Once a wire reaches a fraudulent account, the money is almost always unrecoverable.
After the title company confirms all funds have arrived, the closing agent pays off the seller’s existing mortgage, distributes the agent commissions, remits the transfer tax, and forwards the recording fees to the county. Once every payment clears and the documents are signed, the deed is recorded and ownership transfers.