Are you budgeting for a home purchase or sale in Billings and wondering who pays what at closing? You are not alone. Closing costs can feel confusing, yet understanding them early helps you plan, negotiate, and avoid last‑minute surprises. In this guide, you will learn what typical fees include, how Montana and Yellowstone County practices affect who pays, and simple steps to estimate your numbers with confidence. Let’s dive in.
What closing costs include
Closing costs are the fees, taxes, payoffs, and prorations due at settlement in addition to the purchase price. They often include lender charges, title and escrow services, recording fees, prepaid items like insurance and interest, and seller-side costs such as commissions and lien payoffs.
Nationally, buyers often pay roughly 2–5% of the purchase price in closing costs, while sellers often pay roughly 6–10%. These are general ranges because commission, loan terms, and county fees vary.
Who pays what in Billings
Local customs guide many items, and your purchase contract ultimately controls who pays. Here is how costs are commonly handled.
Buyer typically pays
- Loan-related fees: origination, underwriting, application, credit report, and any discount points.
- Appraisal and most inspections (home, pest, septic if applicable).
- Lender’s title insurance policy if there is a mortgage.
- Prepaid items: first-year homeowners insurance, prepaid interest, and initial escrow reserves for taxes and insurance.
- Recording fees for the mortgage (Deed of Trust) and related documents.
- Some escrow or settlement fees, depending on local practice or contract.
Seller typically pays
- Real estate commission, negotiated with the listing broker and stated in the listing agreement.
- Owner’s title insurance policy in many markets, although this varies by area and is negotiable in Billings.
- Payoff of existing mortgages, liens, judgments, and related release fees.
- Some escrow or settlement fees, depending on local custom or contract.
- HOA transfer or estoppel fees when specified by contract.
Prorated between buyer and seller
- Real property taxes, based on the closing date and county billing cycle.
- HOA dues and utilities that are prepaid or paid in arrears, so each party pays for the period they owned the property.
Negotiable items to discuss
- Who pays the owner’s title policy.
- How escrow or settlement fees are split.
- Seller-paid buyer costs (seller concessions). These must fit loan-program limits set by lenders and investors.
Montana and Yellowstone County specifics
Local rules and practices matter. Keep these Billings-area points in mind.
No statewide transfer tax
Montana does not impose a statewide real estate transfer tax. Always confirm current rules with the Montana Department of Revenue and check for any local fees that may apply.
Recording and county fees
Recording fees are set at the county level and can change. Yellowstone County recording charges often include a base fee plus per-page amounts, with separate fees for deeds, deeds of trust, maps/plats, and releases. Your title company or the Yellowstone County Clerk & Recorder can provide current fee schedules.
Property tax proration
Property taxes are administered by the county and are typically prorated at closing based on local billing periods and whether taxes are paid in arrears or in advance. Work with your title company and verify schedules with the Yellowstone County Treasurer or Assessor so prorations reflect the correct period.
Title and escrow practices
The party who pays the owner’s title policy and how escrow fees are split can vary by market. In Billings, practices may differ by transaction and title company. Confirm current custom with your agent or ask two to three local title companies for an itemized estimate.
Estimate your costs with confidence
Use these quick checklists to get accurate numbers early in the process.
For buyers
- Apply with your lender to receive a Loan Estimate that outlines expected loan-related charges and prepaids.
- Request an itemized estimate from a Billings title or escrow company. Ask about the lender’s title policy, optional owner’s policy, escrow fees, and recording charges.
- Ask your agent for recent property tax history and HOA dues so you can estimate prorations.
- Confirm inspection needs and costs. In some Yellowstone County areas, septic or well inspections may be recommended.
- Review your Closing Disclosure at least 3 business days before closing. This document lists your final loan charges and cash to close.
For sellers
- Ask your listing agent or title company for a seller net sheet. It should estimate your proceeds after commission, loan payoffs, taxes, and typical seller-side fees.
- Order payoff statements for any mortgages, home equity loans, or liens. Payoff quotes include interest to a specific date and any demand or release fees.
- Confirm who pays the owner’s title policy and how escrow fees are split in your contract, given Billings customs.
- Verify property tax status and any special assessments with the Yellowstone County Treasurer or Assessor so prorations and payoffs are accurate.
Timing and what happens at closing
- Disclosures and timing: After you apply, your lender issues a Loan Estimate with good-faith cost details. Your Closing Disclosure must be delivered at least 3 business days before consummation for most mortgage loans. Use these documents to confirm final numbers.
- Who signs what: Buyers sign loan documents, acknowledge the Closing Disclosure, and accept the deed. Sellers sign the deed, settlement statements, and payoff authorizations.
- Escrow’s role: A title or escrow company coordinates signatures, collects and disburses funds, records documents with the county, and issues title insurance. Fee responsibilities follow local custom or the purchase contract.
Smart negotiation strategies
- Ask for clarity on title and escrow: Decide early who pays the owner’s title policy and how escrow fees are split. In Billings, this can vary by deal, so address it in your initial offer or counter.
- Use concessions strategically: Sellers may offer to cover some buyer closing costs, subject to loan-program limits. Your lender can explain caps based on loan type and down payment.
- Weigh rate vs. costs: Buyers can compare paying discount points to lower the rate versus asking for seller credits to offset other fees.
- Keep the close date in mind: Closing on certain dates can affect prepaid interest and prorations. Your agent and lender can help you pick a date that fits your goals.
Common pitfalls to avoid
- Waiting on payoffs: Sellers who delay ordering payoff statements risk last-minute changes to proceeds. Request them early.
- Overlooking county fees: Recording fees and per-page charges can add up. Ask your title company to include current Yellowstone County fees in your estimate.
- Ignoring lender limits: Seller concessions must meet loan-program rules. Confirm limits before finalizing an offer.
- Skipping tax verification: Property tax cycles vary, and prorations hinge on accurate dates. Verify with county offices.
Get local numbers and support
Every transaction is unique, and Billings customs can shift over time. Before you write an offer or list your home, line up estimates from your lender and a local title company, confirm county schedules, and agree in writing on who pays which fees. A clear plan up front keeps your closing smooth and your budget on track.
If you want a precise estimate for your purchase or a seller net sheet tailored to your address, reach out to the Brosovich Real Estate Team. We will coordinate your lender and title quotes, explain local practices, and help you negotiate the best structure for your goals.
Ready to move with confidence? Connect with the Brosovich Real Estate Team for tailored guidance and next steps.
FAQs
Who usually pays real estate commission in Billings?
- The seller typically pays the commission as a percentage of the sale price, negotiated with the listing broker and stated in the listing agreement.
Are closing costs negotiable in Montana home sales?
- Yes. Many items are negotiable, including who pays the owner’s title policy, how escrow fees are split, and whether the seller provides buyer credits within lender limits.
Does Montana charge a real estate transfer tax?
- Montana does not impose a statewide real estate transfer tax. Always confirm current rules with state and county offices.
How are Yellowstone County property taxes prorated at closing?
- Taxes are typically prorated based on the number of days each party owns the home during the tax period, following county billing cycles and due dates.
Who pays for title insurance in Billings transactions?
- The lender’s policy is usually a buyer cost when there is a mortgage. The owner’s policy is negotiable and may vary by local custom, so confirm with your title company.
When will I see my final closing numbers before signing?
- For most mortgage loans, your lender must deliver the Closing Disclosure at least 3 business days before consummation. Review it carefully to confirm cash to close.
