In a North Carolina home sale, the seller customarily pays the state excise tax, the real estate commissions, the payoff of any existing mortgage or liens, and the deed preparation, while the buyer covers loan-related charges, prepaid interest and insurance, recording fees, and the closing attorney. That is the usual split for who pays closing costs in NC, but almost every line is negotiable in the purchase contract.
What the Seller Typically Pays
The excise tax is the signature seller cost in North Carolina. It runs one dollar for every five hundred dollars of the purchase price and is paid to the county register of deeds.1North Carolina General Assembly. North Carolina General Statutes § 105-228.30 – Section: Imposition of excise tax; distribution of proceeds. On a $400,000 sale, that works out to $800. At closing you may hear it called “revenue stamps.”2North Carolina General Assembly. North Carolina General Statutes § 45A-4
The seller’s proceeds also clear whatever is owed on the property. That means the remaining mortgage balance, any home equity line, and outstanding property tax liens are paid off from the sale price before the seller walks away with the net.
Real estate brokerage commissions come out of the seller’s side as well. They often fall in the five to six percent range, but the number is negotiated in the listing agreement, not fixed by the state.
Deed preparation is customarily a seller expense. An attorney generally charges $150 to $300 to draft the deed, depending on how complicated the transfer is. The type of deed and the warranties it carries are set by the parties’ agreement.
Recurring charges that straddle the closing date — property taxes and HOA dues, mainly — are prorated so each side pays only for the days they owned the home. The contract controls how that math is done.
What the Buyer Typically Pays
Most buyer costs are tied to the loan. Expect an origination charge of roughly 0.5% to 1% of the loan amount, an appraisal in the $450 to $700 range, and a credit report fee usually under $100. Exact numbers depend on the lender and loan product.
Financed buyers also fund “prepaids,” which are not fees for services but advance payments for bills that are about to come due:
- Prepaid interest from the closing date through the end of the month
- The first year of homeowner’s insurance
- Initial escrow deposits for future taxes and insurance
Recording fees go to the register of deeds to put the transfer on the public record. The state sets them: $26 for the first 15 pages of a general instrument like the deed, and $64 for the first 35 pages of a deed of trust, with $4 for each additional page.3North Carolina General Assembly. North Carolina General Statutes § 161-10
Buyers also pay the closing attorney, who handles the title work and runs the settlement. That legal fee is separate from anything the lender charges for origination or underwriting. Inspections and any survey the buyer or lender orders are additional third-party costs on the buyer’s side.
One item unique to North Carolina contracts is the Due Diligence Fee. The buyer pays it directly to the seller when the contract is signed, and the seller keeps it, but it is credited back to the buyer at closing and reduces the cash needed at the table.4North Carolina Real Estate Commission. Due Diligence Fees: When Must They Be Deposited?
Items the Contract Decides
Several costs do not have a statutory assignment. Title insurance is the clearest example: state law does not say who pays the premium, so local practice and the negotiation between the parties decide it. An owner’s policy is optional for the buyer, but a lender’s policy is almost always required when there is a mortgage. Rates are regulated by the North Carolina Department of Insurance and filed with the state.5North Carolina Department of Insurance. Title Insurance
Deed preparation, though customarily the seller’s, is also negotiable. And buyers can ask for “seller concessions,” where the seller agrees to put a stated dollar amount toward the buyer’s closing costs. Concessions are often used as an alternative to repair work or as a sale incentive. On a financed deal, the lender has to approve the credit, and most loan programs cap how much the seller can contribute.
How the Money Actually Changes Hands
North Carolina treats the core settlement work as the practice of law, so a licensed attorney is generally involved and oversees the distribution of funds.6The North Carolina State Bar. Authorized Practice Advisory Opinion 2002-1 Every charge discussed above shows up itemized on a Closing Disclosure or similar settlement statement. For most home loans, the lender must get that disclosure to the buyer at least three business days before closing.7Consumer Financial Protection Bureau. 12 C.F.R. § 1026.19 – Section: (f) Mortgage loans – final disclosures
Buyers wire or deliver “good funds” to the attorney’s trust account; state law limits what forms of payment qualify. The attorney cannot release the seller’s proceeds until the deed and loan documents are recorded with the county, so wire timing and the register of deeds’ hours can affect when the seller is actually paid.2North Carolina General Assembly. North Carolina General Statutes § 45A-4 Once recording is confirmed, the attorney pays the seller, the agents, and any other vendors from the funds collected.