What Does It Cost to Buy a Home in New Jersey? Buyer Closing Costs Explained

Plan for more than the down payment. In New Jersey, a buyer's closing costs are mostly lender charges, title insurance and title services, your attorney's fee, and prepaid items like homeowners insurance and the first deposit into your escrow account. The realty transfer fee and the fee on sales over $1,000,000 that people still call the "mansion tax" belong to the seller under state law, and that second one changed in 2025.

I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living. When someone moves here from another state, closing costs are one of the first surprises, because every state splits them differently. Here's how it works in New Jersey, so you can budget before you write an offer instead of after.

What closing costs does a buyer pay in New Jersey?

Your exact list depends on your loan, your lender and your contract. Most buyer costs land in five buckets:

• Loan costs. Origination charges, points if you choose to buy down the rate, the appraisal, the credit report and other lender fees.
• Title insurance and title services. Lenders usually require a lender's title policy. An owner's policy is optional, and it's the one that protects you.
• Your attorney. I recommend every buyer line up a New Jersey real estate attorney before making an offer. The fee is whatever you agree to with that attorney.
• Prepaids and escrow. Interest from closing day to the end of that month, often the first year of homeowners insurance, and the opening balance of your escrow account for taxes and insurance.
• Adjustments. New Jersey property taxes are due quarterly, on February 1, May 1, August 1 and November 1, so the closing figures usually settle up the taxes between buyer and seller for the quarter you close in. Your attorney or settlement agent works out the numbers.

Paying cash? You skip the loan costs and the escrow account. Title, your attorney and the adjustments still apply.

Does the buyer still pay the New Jersey "mansion tax"?

Not under the current law. New Jersey enacted P.L. 2025, c. 69 on June 30, 2025, and it took effect July 10, 2025. It replaced the old 1% fee that buyers paid on homes over $1,000,000 with a Graduated Percent Fee, and the Division of Taxation now says "the seller is statutorily responsible for the RTF and the Graduated Percent Fee."

For residential sales, the fee is a percentage of the total price:

• 1% if the price is over $1,000,000 and up to $2,000,000
• 2% over $2,000,000 and up to $2,500,000
• 2.5% over $2,500,000 and up to $3,000,000
• 3% over $3,000,000 and up to $3,500,000
• 3.5% over $3,500,000

The rate applies to the whole price, not only the part above each line. Two cautions. First, you'll still find older pages online, including a few state pages, that describe a 1% fee paid by the buyer. Go by the Division's current Realty Transfer Fee page. Second, the Division's July 2025 guidance says contract terms that shift the fee are private arrangements between buyer and seller. If you're buying over $1,000,000, have your attorney read that clause during attorney review.

Who pays the realty transfer fee?

The seller. The State "imposes a Realty Transfer Fee (RTF) on the seller of real property for recording a deed for the sale," and it's figured from the price on the deed. If you're coming from a state where the buyer pays a transfer tax, that's one line you can take off your budget here. Sellers who want the full picture can read the costs sellers forget about.

How do you see your closing costs before you commit?

Two federal forms do the work, and every lender uses the same ones.

1. The Loan Estimate. According to the Consumer Financial Protection Bureau, "the lender must provide you a Loan Estimate within three business days of receiving your application." Because the form is standard, it's the cleanest way to compare two or three lenders line by line.
2. The Closing Disclosure. The lender has to give you this one "at least three business days before you close." It shows your final loan terms and costs. Lay it next to your Loan Estimate and ask your lender about any number that moved.

I tell people what they need to hear, not what they want to hear: the time to question a fee is when you get the Loan Estimate, not at the closing table.

Which closing costs can you shop for?

More than most buyers think. The CFPB says "you can shop for all of the services listed in section C of page 2 of your Loan Estimate," and the lender has to hand you a written list of providers when it gives you the estimate. You may be able to use someone who isn't on that list if the lender agrees.

Title costs show up in section B or C. If you choose an owner's title policy, it's listed in section H. In New Jersey, title insurers file their rates with the Department of Banking and Insurance for approval before they use them, so when you compare, ask what each company's quote includes besides the policy itself.

How much cash do you bring to closing, and how do you send it?

Your Closing Disclosure shows your cash to close. The CFPB notes, "You will typically need a cashier's check or wire transfer for this amount." This is where closing scams aim. The CFPB warns that "mortgage closing scams target homebuyers who are close to their closing date."

• Get wiring instructions from your attorney or settlement agent, and confirm them by calling a number you already have, not one from an email.
• Treat any email that changes the instructions at the last minute as a red flag.
• If something goes wrong, call your bank immediately and file a complaint with the FBI's Internet Crime Complaint Center, as the CFPB advises.

What does this look like in Monmouth and Ocean County?

The big local swing is property taxes, because they're set town by town and they drive both the escrow deposit and the closing adjustment. Before you make an offer, look up the home's assessment and last year's taxes through the Monmouth County Board of Taxation or the Ocean County Board of Taxation, and read how property taxes change your monthly payment.

Get homeowners insurance quotes early too. The first year's premium is commonly paid at closing, and the quote can change your cash to close more than people expect. My Relocation Guide has the full order of operations for buying here from out of state, and the relocation page shows how I set up your search from wherever you live now.

What are the most common closing-cost mistakes?

• Budgeting only for the down payment. Closing costs and prepaids come due the same day.
• Assuming your old state's rules apply. Who pays the transfer fee, whether you hire an attorney, and how taxes are collected all differ.
• Skipping the side-by-side comparison. The Loan Estimate exists so you can compare lenders. Use it.
• Trusting an emailed change to wiring instructions. Call first, every time.

Frequently Asked Questions

Does the buyer pay the realty transfer fee in New Jersey?

No. The Division of Taxation says the fee is imposed on the seller when the deed for the sale is recorded.

Who pays the mansion tax in New Jersey now?

Since July 10, 2025, the seller is statutorily responsible for the Graduated Percent Fee on sales over $1,000,000. A contract can allocate it differently as a private arrangement, so have your attorney review that clause.

When will I see my final closing costs?

On your Closing Disclosure, which your lender must give you at least three business days before closing.

Do I need owner's title insurance?

It's optional. The CFPB explains that owner's title insurance protects the homeowner if someone sues and says they have a claim against the home. Lender's title insurance is usually required for a mortgage.

This is general information, not legal, tax or lending advice. Your attorney, lender and tax professional confirm the numbers for your purchase.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. He has been in construction since 2003, building and renovating New Jersey homes. Read more about Dennis Mark.

Keep reading

• How long it takes to close on a house in New Jersey
• Selling in another state while buying in New Jersey
• Selling a New Jersey home too? Start with a free home value.
• Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.