California Selling Costs
Real Estate Commission
Title Service Fees
Owner's Title Insurance
Transfer Tax
Recording Fees
Miscellaneous Fees
1. Real Estate Commission: The biggest closing cost for sellers in California is the real estate commission, which is usually between 5% and 6% of the home's selling price. This fee can be negotiated, and some sellers can avoid it altogether by selling by owner, but studies show that selling with a realtor is worth it in the long run as you'll get a higher price, which will more than cover this fee.
2. Title Service Fees: When you sell a home, you must transfer the title to the new owner, which requires a title search to verify the ownership and ensure there are no outstanding issues or liens. Typically the buyer and seller will both pay for a title search in California, which is usually around 0.3% of the home price.
3. Owner's Title Insurance: Protects you if there are any mixups and someone else has a claim to the home's title. Although uncommon, errors in ownership transfer and the chain to title do occur and can be expensive to solve. So the owner will be responsible for taking out their own title insurance policy, which is usually somewhere around $500 to $1,000.
4. Transfer Tax: California charges a tax to transfer your home to a new owner. The current tax rate is $1.1 per every $1,000 in assessed value or about 0.11%. So if the home is worth $1 million, the tax would be around $1100.
5. Recording Fees: California also charges a fee to record your deed and mortgage information with the local authority. The fee varies depending on the location but typically comes out to about $200 to $300.
6. Miscellaneous Fees: Additional fees are always required at closing that are unique to the transaction. For instance, if it's a slow market, the seller may offer incentives to the buyer to entice them to make an offer, which will be paid at closing. Also, if their seller has any outstanding homeowners association fees, mortgage prepayment fees, or outstanding property taxes, they will likely be due at closing.
7. Capital Gains Tax - Unless exempt, there could be tax implications on your gain, check with your Accountant to verify any information.
Costs are approximate & should be confirmed with the associated
professional.2023
