Who Pays Closing Costs in California for a Home Sale?
Moving is stressful. When you have to move because you’re upside down on your mortgage and want a house with a reasonable payment or because the medical bills have really stacked up and selling the house is the only way to get them back down, the stress only gets that much harder to manage. And the last thing you need is to spend more money than you can afford just to sell your home.
To relieve some of the tension, you might be hoping to lower the costs of preparing your house to sell by performing only a few of the repairs you suspect your home inspector will propose. Knowing there have to be more ways you can reduce your expenses, however, you’re probably wondering who pays closing costs in California when selling a home. Be aware that there’s no state statute or rule that governs this, so it’s really up to you and your buyer. Here, we’ll help to dispel some of the confusion as well as get you on track to potentially reduce all of your costs.
Who Pays Closing Costs When Selling a Home in California?
Unless you’ve sold a home before, it may come as a surprise that the average cost to sell a house usually adds up to about 10% of the sale price—likely tens of thousands of dollars. This throws many home sellers into shock, especially when they find out only after escrow cuts their check and it’s for less money than they’d hoped for, or even planned for. And the cost to close the sale takes out one of the biggest bites: between two and four percent on average.
The last thing you need is to spend more money than you can afford just to sell your home.
This takes into consideration that the buyer is often responsible for many of the closing costs, too. For example, the buyer usually pays for title insurance to ensure the home is free of any liens. They’ll also pay their lender to appraise the house in order to get final approval on the loan. And there are some fees—like those charged by the broker or attorney to prepare the documents and the cost for escrow to handle the transaction—that they will typically split with the seller.
When selling your home in California, it’s far more likely that you’re dealing with individuals who have more spending power and, as a result, more leverage. After all, the average income for California is $71k per year, which is much higher than the US average of about $60k. If you’re in a hurry to sell and dealing with someone who has the buying power to consider multiple options, you may find yourself having to make some concessions and should be prepared to pay the following fees when you sell your house—possibly in full:
- Prorated property taxes
- Property transfer taxes
- Title insurance, if requested by the buyer
- Home warranty to protect the buyer’s purchase for one year
- Homeowners association fees to transfer HOA membership
- Escrow fees to move the deal through a neutral third-party account
- Fees for an attorney facilitating the transaction, if required by your state
- Document preparation and filing fees charged by the attorney or real estate broker
Keep in mind that these costs don’t take into account the concessions you may also have to make to convince a buyer to close on your home. If in order to save money, you’re selling your house with termite damage, outdated plumbing, or even a garage door that no longer works, a buyer may ask for a credit towards their closing costs or a reduction in the final sale price. And, depending on the overall condition of your home, these seller concessions can really add up.
After repairs and closing costs, what you actually net from the sale of your house in the end probably won’t come close to the amount of money you really need.
A real estate agent will charge you a commission to help you sell your property as well, which is why the total cost of selling a home often reaches close to 10% of its selling price. And, if on top of all of these costs, you’ve performed a few repairs on the home, too, then what you actually net from the sale of your house in the end probably won’t come close to the amount of money you really need.
Pay Zero Fees and Sell Your Home Fast
It is possible to reduce almost every expense associated with selling a house and to sell it quickly. In fact, the home-buying specialists at Sell Your House Direct can make the entire experience nearly stress-free. They’ll make you an as-is offer that puts cash directly into your pocket on the day that works best for you, whether it’s in one month or one week. And, because they can take your home as-is, you don’t have to perform any repairs—which will save you both time and money. They’ll even pay for all of the costs to close and contribute toward your move. All you have to do is the point to what you want to keep and let SYHD handle the rest.
So, the simple answer to who pays closing costs when selling a home is “not you”—that is, if you sell your home to Sell Your House Direct.
Selling an inherited home can be a difficult and emotional process, but it is not impossible. There are many things to consider when selling a home that has been passed down to you, such as the current market conditions and your own personal situation. In this blog...
When selling inherited property, it's important to provide the proper documents to interested buyers. This will help them understand the situation and make an informed decision about whether or not to purchase the home. In this blog post, we'll go over the most...
It's a strange time to be a landlord in America. The CDC has declared a temporary ban on some types of evictions. Tenant groups across the country are calling for rent strikes. And as more and more people are unemployed or furloughed because of the pandemic, with...