Quick Guide to Closing Costs in California

by | Jan 7, 2020

Imagine that when chatting with a neighbor about their difficulty selling a house with mold in San Diego, you and your spouse began to wonder if you’d have trouble selling your old and outdated home. It’s not that your house has similar issues or is in need of major repairs, but it has been a while since you’ve done any work. Money has been tight. In fact, it’s because the upkeep of your home is costing more than you’ve got that you’ve decided to sell and find a more affordable house.

You know from your neighbor that the average cost to sell a home in California is also pretty high, especially if you choose to do any major repairs. So, as a family, you’ve decided that you’re going to try listing the home as-is. With some luck, you’re hoping that will save you some cash. Unfortunately, the closing costs in California can be a heavy lift when that opportunity to sell does arise. So, we want to prepare you for those—and offer a way for you to save money there as well.

What Are the Typical Closing Costs in California?

It’s often a surprise for sellers to learn that when they sell a house, there are fees to pay at closing time—and that not all of them are covered by the buyer. In fact, depending on the condition of your property, a few closing costs may get paid by the other party. If you’re trying to sell a house with termite damage, a leaking roof, or even a garage door that doesn’t work, buyers will want credit towards their costs so they can offset the expense of future repairs.

Closing costs in California can amount to about 10% of your home’s final selling price.

In California, the type of costs you’ll pay to close on the sale of your home is the same, or similar, to those in other states. And the one notable exception actually works in your favor: you’re not required to use a lawyer to oversee the transaction. Whereas, if you lived in Maine or South Carolina, you’d have no choice about hiring a real estate attorney.

That said, even without a real estate lawyer, what you’ll pay in closing costs in California can amount to about 10% of your home’s final selling price. For a lot of homeowners, that’s more money than they can afford to be without. If you’re behind on your house payments or have other bills piling up, you probably need to keep every last cent from the sale of your house.

Unfortunately, there are few ways around hiring certain services to help you close the deal. So, let’s take a look at the typical fees you may be required to pay so that you can be prepared:

  • To safely facilitate the exchange of money between you and a buyer, you’ll need to hire an escrow company to act as a neutral third party. In California, this will cost you around $2.00 for every $1,000 of the sale price for your home—in addition to the base rate they initially charge. Additional services, like transferring funds via wire into your account, cost extra.
  • To legally pass the ownership of your house to a buyer, you’ll have to pay your county’s Documentary and Property Transfer Tax. On average, this costs $1.10 per $1,000 of your property’s value, particularly in counties like San Diego.
  • If you belong to a homeowners association (HOA), you’ll have to pay to transfer your membership. These costs vary widely, but you can expect to be charged for every detail—including a fee for just preparing the documents.
  • To protect the buyer from inadvertently taking ownership of any unpaid debts, you’ll probably have to pay for title insurance to prove there aren’t liens attached to the house. And if your title isn’t clear—whether you knew it or not—you’ll have to pay to resolve that problem before someone else can become the home’s owner.
  • A home warranty can give a buyer confidence about purchasing your home and help protect you from being liable for issues that arise later. So, you might want to buy a one-year warranty when selling your house. On average, warranties cost more than $800. But for some properties in California, a one-year home warranty could cost several thousand.
  • If you hired a real estate agent to help sell your house, their fee will also come due once your home sells. In California, 6% of the selling price is a common commission charged. As you can see, this fee alone accounts for more than half of the typical costs to close.

The exact dollar amount you’ll spend on all closing costs in California won’t be easy to determine until you actually seek help for the above services. But with most sellers spending tens of thousands of dollars on the cost to close the transaction, you should expect to pay that much or more when you decide to sell yours. After all, the average cost to sell a house nationally usually falls short of what Californians pay when selling their homes.

With the right buyer, you could avoid closing costs, as well as repairs and cleaning and purging your home.

The good news is that it’s possible to keep all of your closing costs low, including the fees you have to pay to a real estate agent. In fact, you can even sell your property without an agent’s help at all. It just requires a reputable buyer who can buy your house direct and who is willing to pay most or all of the fees you might otherwise face.

Avoid the Typical Fees by Selling to an Uncommon Cash Buyer

At Sell Your House Direct, we know how costly it gets to both buy and sell a house, especially in California. We’ve been doing both for years—and those costs just keep going up. But because our relationships with our clients remain priority number one, we continue to buy their houses for cash fast. And we still charge zero commissions and fees.

In addition to paying all cash, we’ll also take your house as-is. And it’s not just the rehab you can skip—it’s everything else, including cleaning and purging. You can even point to what you want to keep and let us handle getting rid of the rest. Our goal is to help you sell your house with the least amount of stress.

Don’t worry about paying those California closing costs, either. We’ve got you covered.

For an all-cash offer from a local home buying specialist, contact us. We’ve got all the closing costs covered so you can move on quickly.

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