When you sell your home, there are additional costs besides agent commissions or preparations to your home that are paid at closing. These closing costs typically include title service, title insurance, and transfer taxes — additional costs could apply depending on your exact situation.
For a home sale in California home sellers can expect to pay 1.1-1.2% in closing costs. For a median-value home sold for $579,332, this translates to about $6,636.
Below, we go into detail about what costs you can expect as a home seller in California, who pays for which costs, and how much you can expect to pay.
JUMP TO SECTION
How much are seller closing costs in California?
The final step of the home selling process is closing or settlement. This is when you'll sign all the paperwork, exchange money, and transfer ownership of your property over to the buyer.
This is also when you'll pay closing costs, which are an assortment of fees associated with the closing process. Home sellers pay at least some closing costs in most typical real estate transactions, so don’t be caught off guard when the bill comes due.
In California, home sellers can expect to pay 1.1-1.2% of their home sale price in closing costs. With California’s median home value of $579,332, the closing costs equate to about $6,636.
You can always negotiate with your buyer to determine who pays what fees.
The following are the typical costs you can expect to see at the end of a home sale, with an average cost estimate based on California’s median home value:
Title service and closing fees: 0.26-0.30% (~$1,652)
These fees are related to any cost accrued to process, search for, record, notarize, etc. the deed to your property. Fees can vary by service, but they are typically handled by a settlement agent from an escrow or title company. It’s common for these costs to be split between buyers and sellers.
Title insurance: 0.29-0.30% (~$1,709)
Title insurance protects homeowners in disputes over ownership of the property. Sometimes there are errors in the paperwork, unpaid property taxes from the previous owner, or other issues involving the title of your home. A title insurance company will protect its policyholders by covering costs to resolve these issues or even go so far as to reimburse you the value of your home.
Since the buyer must purchase a title insurance policy from their lender, the seller often pays for the homeowner's policy as a courtesy to the buyer.
Transfer taxes and recording fees: 0.56-0.57% (~$3,275)
To transfer ownership at closing, you will be charged a transfer tax by the state, county, and/or city your former property resides in. Like other closing costs, who pays for these taxes is negotiable, but often enough, the seller will cover these fees.
» MORE: California Transfer Taxes
Property taxes: Varies
Property taxes are paid by the seller in arrears — i.e. at the end of a pay period — so the total cost depends on when you sell your home. To be fair to your buyer, property taxes are prorated to only cover the time you own your home.
Currently, the tax rate in California is 0.77%, but your city may levy a property tax as well.
Other closing costs
There are a number of other closing costs that a seller may encounter, but it depends on your exact situation and the property being sold. These additional costs may include:
- Home Owner’s Association (HOA) fees
- Settlement or attorney fees
- Property appraisal fees
- Mortgage payoff and/or prepayment penalties
Other home selling costs in California
Outside of the above closing costs there are other fees to be paid at closing — namely, realtor commission. In California, the average commission rate is 5.02%, which covers the commission fees for both the the listing agent and the buyer’s agent.
This fee is often the largest single cost incurred by home sellers.
Who pays closing costs in California?
Both buyers and sellers have closing costs that they'll usually have to pay at closing. That said, closing costs are also 100% negotiable — who pays for what closing costs is often a key point of negotiation during a real estate transaction.
There are certain closing costs that are customarily paid by the buyer’s and those that are often covered by the seller. Here’s a breakdown of who typically pays for what in California, as well as an estimation cost based on our own research and the median home value in of $579,332:
|Closing cost||Who typically pays||Amount|
|Owner's title insurance||Seller||$1,674|
|Lender's title insurance||Buyer||$766|
|Closing fee||Both||$1,390 (each)|
|Recording fees||Varies||Approx. $50-70|
How to calculate your closing costs in California
A good rule of thumb for sellers anywhere is to expect to pay around 1-3% of their home’s sale price in closing costs. In California, however, we found these costs typically range from 1.1-1.2% of the sale price instead. But keep in mind that every situation, buyer, title company, etc. is different. Ultimately, closing costs will come down to what you negotiate with your buyer and which providers you use.
In the meantime, it never hurts to have an estimate of what you may end up paying. For a typical California home, here’s how the closing cost calculation breaks down:
|Home sale price||$579,332|
|Title Insurance (0.29-0.30%)||$1,672-1,764|
|Title Service Fees (0.26-0.30%)||$1,533-1,747|
|Recording Fees & Transfer Taxes (0.56-0.57%)||$3,245-3,305|
|Total closing costs||$6,450-6,816|
» LEARN: How to use a seller net sheet