How Much Are Closing Costs in California?

How Much Are Closing Costs?

 What Home Buyers and Sellers Can Expect

Closing costs are the fees paid by buyer and seller to third parties at the closing of a real estate transaction that help facilitate the sale of a home.

The point in time called the Closing is when the Title to the property is transferred from the seller to the buyer. 

You can estimate that closing costs typically around 1% to 5% of the home purchase price. So, on a $500,000 home, your closing costs would amount to anywhere around $5,000 up to $25,000. I generally estimate the closing costs between 2% - 3%. For buyers it depends on whether you obtain a loan or pay cash.

How much are closing costs for buyers?

Here are some of the fees home buyers usually pay:

• A loan origination fee, which lenders charge for processing the paperwork for your loan.
• A fee for running your credit report.
• A wire transfer fee. 
• A fee for the underwriter, who assesses your credit worthiness
• A fee for the appraisal of the home 
• Escrow fee
• HOA documents transfer fee
• A fee for the third party home inspection
• A fee for a title search to unearth any liens on the property that could interfere with your ownership 
• Taxes on the money you’ve borrowed for your home loan.

 

How much are closing costs for sellers?

Here are some of the fees home sellers usually pay:

• Standard owner’s Title Insurance
• Real estate agent commission
• Document preparation fee for deed
• Documentary transfer tax 
• Any FHA or VA loan fees required by the Buyer’s lender
• Payoff of all loans in the Seller’s name (or existing loan balance if being assumed by the Buyer)
• Interest accrued to Lender being paid off including statement fees, re-conveyance fees, and any prepayment penalties.
• Any judgment, tax liens, etc. against the Seller
• Recording charges to clear all documents of record against the Seller
• Tax proration (for any taxes unpaid at time of transfer to title)
• Any unpaid Homeowners dues
• Any and all delinquent taxes
• Notary fees
• Termite inspection and clearance
• Escrow Fee (50%)

To estimate your closing costs, enter your numbers into an online closing costs calculator, or ask your Realtor, lender, or mortgage broker for a more accurate estimate. Then, at least three days before closing, the lender is required by federal law to send buyers a closing disclosure that outlines those costs once again. Before you close, make sure to review these documents to see if the numbers line up to what you were originally quoted. 

Realtor.com-Judy Dutton; Elena Akinshina