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

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Happy Holidays! Happy Homes California! Global Luxury Real Estate! Рождество в США, Santa Monica

 

Wishing you a very Happy Holidays!

This is some holiday music for you.

And, I would love to help you buy or sell your home!

It would be my pleasure to provide your home market value.

Contact me to get a complimentary comparative market analysis: (949)202-8497

Years of experience selling homes in Los Angeles and Orange County, California.

Spectacular Estate in Los Angeles, Prime Location, Large Lot

Elena Akinshina, Luxury Home Specialist in Los Angeles & Orange County

 Dream Home California  

Los Angeles, Newport Beach, Santa Monica, Beverly Hills

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Master's Degree in Business Management and Economics.

Current resident of Santa Monica, Newport Beach areas and Westside LA for 19 years.

Selling Real Estate along the coast from LA to OC since 2005.

I love helping my clients and lead them through every step of a home buying or selling process, making it as smooth as possible.

Call, text or email me anytime with any of your real estate needs:
 

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How to Buy and Sell a Home Simultaneously

 How to Buy and Sell a Home at the Same Time

If selling and buying simultaneously is the only way to go, here’s what you need to know to make sure both processes go as smoothly as possible.

KNOW THE MARKET FIRST

Before you start seriously searching for a new home—or put your current home on the market—make sure you have a solid understanding of the housing market in your area (and the area where you’re planning to buy). Is the market weighted toward buyers or sellers?

Find multiple suitable options. That way, you’re less likely to find yourself in trouble if your purchase falls through—your newly sold home won’t leave you stranded.

Similarly, make sure to hire an appraiser and price your old home fairly. Now is decidedly not the time for delusions of grandeur: Two extra months on the market because you couldn’t humble yourself to lower the price means two months you’ll be paying double mortgages.

PLAN CAREFULLY

Should you buy first, then sell—or vice versa? Both have their risks and rewards. Selling first makes getting a mortgage easier, but it also means you’ll need to find a temporary place to live. Buying first means moving will be easier, but it also skews your debt-to-income ratio, making it harder to qualify for a new mortgage—not to mention the difficulty of juggling two monthly house payments.

When determining whether you should sell or buy first, think beyond  “How can I make the move as easy as possible?”  Instead ask: “Can I handle two mortgages? What if my home sells for less than its listing?”

Whichever option you choose, make sure you’re prepared to accept the consequences: having to store your stuff and rent temporarily, or undergoing the financial burdens of dual mortgages.

DON’T RELY ON TIMING

Remember: You’re not the only party in this equation. For every seller there’s a buyer, for every buyer a seller. While things might appear to be working smoothly when viewing your master plan from above, that doesn’t take into account the variability of other people. Closings are rife with delays. Your buyers might have difficulty securing their mortgage; your home inspector may bring up issues that need to be fixed before you can move in.

So even if you’ve planned to sell your home first and are prepared to rent while buying, know that even the best-laid plans go awry—and you might end up juggling both mortgages. Preparing yourself for this (however remote) possibility ahead of time will ensure a smooth transition.

KNOW YOUR FINANCIAL SOLUTIONS

For those who choose to sell first, the process is relatively straightforward other than the additional cost of a rental between homes. However, there is the option of a rent-back agreement, where you negotiate with the lenders and buyers to be able to remain in the property for a maximum of 60 to 90 days—often in exchange for a lower selling price or rent paid to the buyers. This can relieve some of the pressure of finding a new home, giving you additional time to house hunt.

But if you’re buying first, talk to your Realtor about ways to decrease your financial burden and risk. Here are the two most popular options for buyers:

Contract contingency: Buyers can request that their new home purchase be dependent on the successful sale of their existing home. If you’re looking in a competitive market, this may not be a good option. In a market when listings are selling fast with multiple offers, no listing agent would advise a seller to accept a contingent offer. However, if the seller of your intended home has had difficulty attracting interest, this may be a good deal for all parties involved—assuming you can convince them that your home will sell quickly. Usually, selling a home takes much longer than it takes the average buyer to find a home to purchase. 

When you list your home for sale it takes some time to get the home ready and advertised online, then have agents and buyers to view it. Therefore, having your home on the market while looking for a new home will save your time and make your buying position much stronger. If you receive offers on your current house before you find a new home you have lots of options to extend your time in negotiations over these offers by: Negotiating a longer closing period or Negotiating a lease-back from buyers after closing.

Bridge loans: Bridge financing allows you to own two homes simultaneously if you don’t have deep pockets for a second down payment. This option is especially attractive if you’d planned to sell your home first and use the proceeds to buy the second. It functions as a short-term loan, intended to be repaid upon the sale of your original house.

DON’T LET FEAR RUSH YOU

If your home has sold but you haven’t found a new place to live, don’t let anxiety push you toward a bad decision.

Found the perfect home right on schedule? That’s great. But don’t feel like you have to compromise on things that are important to you just because you need to find a home. Conversely, don’t accept a bid that you feel is too low just because your finances are strained by two mortgages. If you have a temporary apartment set up, you’re less likely to compromise.

Certainly, selling and buying a house simultaneously can be stressful—but carefully considering and planning for the risks and hurdles should reduce the stress.

Realtor.com 

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