Understanding Closing Costs in California: Who Pays What?

When you sell a home in California, the sale price isn't what you actually walk away with. Closing costs can range from 6% to 10% of the final sale price. Here is a breakdown of where that money goes.

1. Realtor Commissions (The Big One)

• Cost: Typically 5-6% of the sale price.
• Who Pays: Usually the seller pays both their agent and the buyer's agent.
• Example: On a $500,000 home, this is $30,000.

2. Title Insurance

• Cost: ~$1,500 - $2,500.
• Who Pays: In Northern California (like Sacramento), it is customary for the buyer to pay for title insurance, but this is negotiable. In Southern California, the seller often pays.

3. Escrow Fees

• Cost: $2.00 per $1,000 of sale price + base fee ($1,500 total).
• Who Pays: Usually split 50/50 between buyer and seller.

4. County & City Transfer Taxes

• Cost: $1.10 per $1,000 of sale price (County). Some cities (like Sacramento) have additional transfer taxes.
• Who Pays: Usually the seller.

5. Natural Hazard Disclosure (NHD)

• Cost: ~$100.
• Who Pays: Seller.

How to Avoid These Fees

If you sell to a direct buyer like Community Renaissance:

• Zero Commissions: Save that 6%.
• We Pay Closing Costs: We cover escrow, title, and transfer taxes.
• Net Price: The offer price is what you actually get (minus your mortgage payoff).

Understanding these numbers is critical to calculating your true "bottom line."

Frequently Asked Questions

How much are closing costs for sellers in California?

Closing costs for sellers in California typically range from 6% to 10% of the sale price, with realtor commissions (5-6%) being the largest expense.

Can I avoid paying closing costs?

Yes. If you sell to a direct cash buyer like Community Renaissance, we cover all closing costs and there are no realtor commissions. The offer price is what you receive.