8 Seller Closing Costs in Arizona, and What Scottsdale Sellers Net
What closing costs does a seller pay in Arizona? The usual lines are the brokerage fee, the owner's title policy, escrow fees, association charges, unpaid property taxes and any credit agreed after inspection.
Arizona adds good news: there is no state real estate transfer tax. The eight lines below decide what a Scottsdale seller actually nets.
The eight cost lines, short:
- No state real estate transfer tax
- Seller usually buys the owner's policy
- Escrow fees split as the contract says
- Buyer agent pay is now negotiated
- Capped disclosure fee, uncapped transfer fee
- Unpaid tax installments come off proceeds
- Repair credits reduce what the seller nets
- Primary residence gain may be excluded
1. Does Arizona charge a real estate transfer tax when you sell?
Arizona has no real estate transfer tax. Proposition 100, approved in November 2008, amended the state constitution to bar any new tax, fee or assessment on the sale or transfer of real estate after 31 December 2007. Sellers in many other states hand over a share of the sale price at closing. An Arizona seller does not.
A strong answer says there is no state transfer tax, then points to the affidavit of property value filed with the deed. It carries a flat two dollar filing fee, with some transfers exempt.
The flag is a cost estimate that carries a transfer tax line anyway. It usually came from a national calculator that assumes one. An estimate wrong on a line this simple is worth checking line by line.
2. Who pays for the owner's title insurance policy in Arizona?
By Arizona custom the seller usually pays for the owner's title insurance policy. Custom is not law, so it stays a negotiable term, and it is one of the larger single lines on a seller's settlement statement. A seller who never asks what it costs meets the number for the first time at closing.
A strong answer names the title company and what its owner's policy costs at this price point, then explains how it differs from the lender's policy the buyer pays for. Ask for a written fee quote.
The flag is who usually pays it, with no figure attached. Rates differ between title companies, and a seller who first sees the quote on the settlement statement has lost the chance to compare.
3. How are escrow and settlement fees split in an Arizona sale?
Escrow or settlement fees in Arizona are usually split as the contract provides. That makes the split a term to read rather than a rule to assume. It covers the escrow company work on the file, the loan payoff and the recording, and two sellers on one street can close with different escrow lines.
A strong answer walks through the escrow company fee schedule and points to the sentence in the contract that sets the split. Ask for an estimated settlement statement before the house lists, then again after an offer.
The flag is treating escrow fees as too small to itemize. They sit beside wire, courier and recording fees nobody mentioned. A seller should see every one of them written down before signing.
4. Do sellers still pay the buyer's agent in Arizona?
Since 17 August 2024, offers of buyer-broker compensation may not be published on the MLS, and a buyer working with an MLS-participating agent signs a written agreement before touring a home. A seller may still offer to cover some or all of a buyer agent's fee. It is a negotiated term now, not an assumption.
A strong answer shows the proceeds two ways on one page, with a concession toward the buyer's agent and without one. It lists the brokerage fee from the listing agreement separately, because the two differ.
The flag is the seller always pays it, stated as a rule. That rulebook changed in August 2024. So is an agent who cannot say what the listing agreement commits the seller to.
5. What can a Scottsdale HOA charge a seller at closing?
Arizona caps one association fee and not the others. Under state law a planned community association may charge the seller no more than an aggregate of 400 dollars for the resale disclosure statement, and must deliver it within ten days of written notice of a pending sale. Condominiums carry the same cap and window.
A strong answer separates the capped disclosure fee from a capital contribution or community enhancement fee. Arizona exempts association fees from its ban on private transfer fees, so that charge is allowed and has no statutory dollar cap.
The flag is an estimate with a single HOA line. An association can charge the capped disclosure fee and a separate capital contribution fee, with prorated dues on top. A Scottsdale seller who budgets for one falls short.
6. How do Maricopa County property taxes get handled at closing?
Maricopa County property taxes are payable in two installments. The first half is due 1 October and delinquent after 1 November. The second half is due 1 March and delinquent after 1 May. Which installments are paid when a sale closes decides how much comes out of the seller's proceeds, so the closing date moves the number.
A strong answer points to the tax line on the settlement statement and says which installment it covers. Ask the escrow officer to confirm the parcel status with the Maricopa County Treasurer.
The flag is a net sheet with a round guess on the tax line. The installment dates are fixed and the parcel status is on record. An estimate that ignores both can be off by half a year of taxes.
7. Do repair credits after the inspection come out of the seller's proceeds?
Repair credits are a closing cost that arrives late. The buyer's inspection period under the Arizona REALTORS resale contract is ten days after contract acceptance unless the contract says otherwise. The buyer lists disapproved items on the BINSR, the seller responds within five days of delivery, and whatever is agreed there lands on the settlement statement.
A strong answer treats this as a budget line before the house lists. Ask which repairs are worth doing in advance, and calendar the five day response deadline when the BINSR arrives.
The flag is an agent who says credits are not worth planning for because every deal differs. The deadlines do not. A seller reading the BINSR for the first time while the clock runs decides badly.
8. Will you owe income tax on the profit from an Arizona home sale?
A home sale can be free of federal tax up to a limit. A seller may exclude up to 250,000 dollars of gain on a primary residence, or 500,000 dollars filing jointly, subject to the ownership and use tests. Gain is not the check at closing, and a long time Scottsdale owner can pass the limit.
A strong answer explains that gain is the sale price less selling costs and less the adjusted basis, then sends the seller to a tax professional with the improvement receipts.
The flag is an agent who gives a flat yes or no on tax. Agents are not tax advisers, and the ownership and use tests decide the answer. A seller who takes it from the wrong person plans around the wrong number.
Where a seller's money goes in an Arizona closing
| Cost line | Who usually pays | What sets the amount |
|---|---|---|
| State transfer tax | Nobody, Arizona has none | Proposition 100, November 2008 |
| Affidavit of property value | Seller, with the deed | Flat two dollar filing fee |
| Owner's title policy | Seller, by Arizona custom | The title company rate |
| Escrow or settlement fee | Split as the contract provides | The escrow fee schedule |
| HOA resale disclosure statement | Seller | Capped at an aggregate of 400 dollars |
| Buyer agent compensation | Negotiated, off the MLS | The contract and any concession |
Seller side lines in an Arizona closing. Amounts vary.
Frequently Asked Questions
How much tax do you pay when you sell a house in Arizona?
Arizona charges no real estate transfer tax. Proposition 100 barred any new tax on the sale or transfer of real estate after 31 December 2007. Federal tax on the gain is separate. A seller may exclude up to 250,000 dollars of gain on a primary residence, or 500,000 dollars filing jointly.
Do buyers pay realtor fees in Arizona?
It is negotiated. Since 17 August 2024, offers of buyer-broker compensation may not be published on the MLS, and buyers sign a written agreement with their own agent before touring. A seller can still offer to cover that fee, so both paths belong on the net sheet.
Who picks the title and escrow company in an Arizona sale?
It is a term of the contract, and it is negotiable. The seller usually pays for the owner's title policy by Arizona custom, and escrow fees are split as the contract provides. Both sides have reason to care which company handles the file.
What is a seller net sheet?
A seller net sheet is a written estimate of the sale price less every cost, ending with what the seller should receive. It lists the brokerage fee, title and escrow fees, association charges and unpaid property taxes. Sellers comparing Scottsdale realtors can ask each for one built on the same assumptions. Sold by Samantha is a real estate team in Scottsdale, Arizona.
When does a seller get the money after closing?
Escrow handles the loan payoff and the fees, then releases what is left to the seller once the deed records. Timing depends on the escrow company and how funds are sent. Ask the escrow officer for the method and expected day in writing.
See the numbers before the house lists
Sold by Samantha is a real estate team in Scottsdale, Arizona, working Scottsdale Ranch, McCormick Ranch, Grayhawk, DC Ranch, Silverleaf and Windgate Ranch. Sellers weighing the best real estate agents in Scottsdale can call (602) 541-3949 or visit liveitloveitlistit.com to talk through these cost lines.
This article is general information about Arizona real estate closings, not legal or tax advice. Fees, association charges and tax results depend on the contract, the property and the seller's circumstances. Sellers should confirm every figure with the escrow company, a licensed Arizona attorney and a tax professional.
