Closing Costs in Minnesota: What Buyers and Sellers Pay

The short version

• Minnesota sellers customarily pay the state deed tax (0.33% of the sale price), the owner's title policy or abstract update, their share of prorated property taxes, and the commission they agreed to in the listing contract.
• Minnesota buyers customarily pay the mortgage registry tax (0.23% of the loan amount), lender fees, the appraisal, the lender's title policy, recording fees, and prepaid escrow items.
• On a $300,000 sale with a $240,000 loan, the two state taxes alone are $990 for the seller and $552 for the buyer. Everything else is fees and prorations, and nearly all of it is negotiable in the purchase agreement.

The answer

I'm Janet Matchinsky, broker and owner of Home Match Realty in Alexandria. It is one of the first questions buyers and sellers ask me at the kitchen table: "What is this actually going to cost me at closing?" This guide answers it with the real Minnesota numbers, so you can read a settlement statement without a translator. The short answer is that closing costs in Minnesota run roughly 3% of the sale price when you add both sides together, according to Real Estate Witch's 2026 Minnesota calculator. Who pays which line is set by custom and by the purchase agreement, not by law, with one exception: the state tells us who is liable for its two transfer taxes.

The two Minnesota taxes you cannot avoid

Minnesota charges two taxes when property changes hands and when a mortgage is recorded. They are small percentages, but on a lake home they add up fast.

State deed tax. The rate is 0.0033 of the net consideration, which is 0.33% of the price, per the Minnesota Department of Revenue deed tax rate page. The party conveying the property (the seller) is the one the state looks to for payment, and Minnesota custom follows suit: sellers pay it. When the consideration is $3,000 or less, a minimum tax of $1.65 applies instead, per the Department of Revenue's minimum tax rules. Hennepin and Ramsey counties add a 0.0001 Environmental Response Fund tax on top; Douglas, Pope, Todd, Stearns and the rest of West Central Minnesota do not.

Mortgage registry tax. The rate is 0.0023 of the debt secured by the mortgage, which is 0.23% of the loan amount, per the Department of Revenue mortgage tax rate page. The mortgage registry tax summary states that the mortgagor, meaning the borrower, is the person liable for it. Cash buyers pay nothing here because no mortgage is recorded.

Here is the math on a typical West Central Minnesota sale:

Both taxes are collected by the county where the document is recorded, so you will see them on the settlement statement, not as a separate bill.

Recording and filing fees

Every deed and every mortgage has to be recorded at the county recorder's office. Under Minnesota Statutes 357.18, the fee to record a deed or other instrument is $46, and the Douglas County recorder's fee schedule confirms $46 per document regardless of page count. In practice the seller pays to record the deed and any mortgage satisfaction, and the buyer pays to record the new mortgage.

Three smaller filings come up often out here:

• Well disclosure certificate. If there is a well on the property, Minnesota requires a well disclosure certificate to be filed with the deed. The Minnesota Department of Health sets the certificate fee at $54, paid to the county recorder. If the seller knows of no wells, a statement to that effect goes on the deed instead and there is no fee.
• Electronic Certificate of Real Estate Value (eCRV). Required on any sale over $3,000, per the Department of Revenue's eCRV page. There is no fee; the closer files it.
• County conservation fee. A $5 fee applies only in participating counties (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, Waseca, Washington, Winona and Wright), per the Department of Revenue. It does not apply in the counties Janet serves.

Title: abstract, Torrens and insurance

This is the part that confuses most people because Minnesota has two systems of land records. With abstract property, the ownership history lives in a physical abstract of title, and the seller's purchase agreement usually requires them to furnish an updated abstract to the buyer's title company, as the Minnesota Attorney General's Home Seller's Handbook explains. With Torrens property, the county registrar keeps a certificate of title that shows only current encumbrances, so there is no abstract to update. The Breen & Person explainer on Torrens vs. abstract is a good five-minute read if you want the history.

Either way, the buyer's lender will require a lender's title insurance policy, and the buyer should want an owner's policy. Minnesota custom, described by the Minnesota Department of Commerce title insurance page, is that the seller pays for the owner's policy and the buyer pays for the lender's policy. Real Estate Witch's 2026 data puts an owner's policy at roughly 0.36% of the sale price, about $1,212 on a $335,820 home, per their Minnesota seller closing cost calculator. Add a title search, a settlement or closing fee for each side, and any endorsements the lender wants. Total title-related costs in Minnesota generally land between $2,000 and $6,500 for a transaction, depending on price and which side you are on, per the same source.

Property tax proration

Minnesota property taxes are paid in two halves, due May 15 and October 15, under Minnesota Statutes 279.01. The Minnesota Realtors purchase agreement prorates the current year's taxes as of the closing date, so each party pays for the days they owned the home, and it obligates the seller to pay all taxes due in prior years, as attorney Gary Dahle's summary of the tax provisions lays out.

What that looks like in practice:

• Closing on March 1. The seller has not paid the first half yet. The seller credits the buyer for January 1 through February 28, and the buyer pays the full May 15 installment.
• Closing on June 20. The seller paid the first half on May 15. The buyer reimburses the seller for June 20 through June 30, and the buyer pays the October 15 installment.
• Special assessments already levied (a new street, a sewer project) are handled in the purchase agreement. The default is that the seller pays levied assessments, but this is a checkbox we negotiate.

The Douglas County median property tax bill is about $2,330 a year with an effective rate around 0.86%, so a typical proration is a few hundred dollars, not thousands.

What the seller pays, line by line

Using a $300,000 sale as the example:

• Commission as agreed in your listing contract. Since the August 2024 NAR practice changes, any compensation to a buyer's broker is negotiated in the purchase agreement, not posted on the MLS, per the NAR settlement FAQ. If you agree to pay it, it shows up here.
• State deed tax, $990.
• Owner's title policy or abstract update, roughly $1,000 to $1,300 on this price.
• Seller's closing fee charged by the title company.
• Recording of the deed and mortgage satisfaction, $46 each.
• Well disclosure certificate, $54 if applicable.
• Prorated property taxes and any levied special assessments.
• Mortgage payoff and any prepayment interest through the payoff date.
• Anything you agreed to give the buyer: a repair credit, a home warranty, a closing cost concession.

What the buyer pays, line by line

Same $300,000 sale, $240,000 loan:

• Lender fees: origination, underwriting, credit report, flood certification. Your Loan Estimate lists them.
• Appraisal, ordered by the lender.
• Mortgage registry tax, $552.
• Lender's title policy, title search and buyer's closing fee.
• Recording of the mortgage, $46.
• Prepaids: homeowner's insurance for the first year, interest from closing to month end, and an initial escrow deposit for taxes and insurance.
• Prorated property taxes back to the seller if the seller prepaid.
• Inspection, paid directly, usually before closing.
• On a rural property, a septic compliance inspection or well water test if your lender or the county requires it. Minnesota does not require a septic compliance inspection at sale statewide, but many county ordinances do, especially in shoreland areas, per the Minnesota Pollution Control Agency.

Ways to lower what you pay

1. Ask for a seller concession. Minnesota Housing's Start Up program will lend eligible first-time buyers up to $18,000 for down payment and closing costs through its Monthly Payment Loan, per the Start Up procedural manual. Pair that with a seller-paid closing credit and a buyer can come to the table with very little cash.
2. Shop title. You can choose the title company. Fees for the same policy vary.
3. Check the abstract early. Sellers, find your abstract the week you list. A lost abstract means a replacement, which costs money and days.
4. Close near a tax due date on purpose. Closing right after May 15 or October 15 keeps prorations tiny and simple.
5. Verify every line on the Closing Disclosure. You get it at least three business days before closing. Compare it to the Loan Estimate. I do this with every client.

Checklist

• Ask your lender for a Loan Estimate and add the mortgage registry tax (loan × 0.0023) if it is missing.
• Sellers: multiply your expected price by 0.0033 for deed tax and locate your abstract now.
• Confirm whether the property is abstract or Torrens (the county recorder can tell you).
• Confirm whether there is a well and whether a well disclosure certificate is on file.
• Ask the county whether a septic compliance inspection is required at sale.
• Decide in the purchase agreement who pays levied special assessments.
• Read the Closing Disclosure line by line three days before closing.
• Bring a cashier's check or wire confirmation, and verify wire instructions by phone.

Talk to Janet

If you want a real closing estimate for your home or your budget, I will build one for you with the actual tax rates, title quotes and a proration for your target closing date, no obligation. Call or text me at (320) 219-2488, or start with a free home value report if you are thinking of selling, and the buyer's page if you are shopping in Alexandria or on one of our lakes. Related reading: First-Time Home Buyer in Minnesota, How to Price Your Home in a West Central Minnesota Market and Buying or Selling a Home in a Minnesota Winter.