Selling a home in California can be a complex and costly process. Here’s a breakdown of the estimated costs you may incur:
Title service and insurance: .25% Of sale price
- Title fees cover the costs of the title search and title transfer.
- Owner’s title insurance protects the buyer if there’s a problem with the property title. It will pay for any legal fees if mistakes are found — or potentially even reimburse the value of the home.
Escrow Fee’s: .208% of sale price
- Holds and manages funds: The escrow company holds the buyer’s good faith deposit (also known as earnest money), down payment, and closing costs until all conditions of the sale are met.
- Protects buyer’s deposit: The escrow company ensures that the buyer’s deposit is safely held and only released to the seller once the sale is complete and all contingencies have been satisfied.
- Facilitates transfer of ownership: The escrow company manages the transfer of title and property ownership, ensuring a seamless transition from seller to buyer.
- Verifies and disburses funds: Upon completion of the sale, the escrow company verifies that all conditions have been met and then disburses the funds to the appropriate parties, such as the seller, lender, or title company.
- Maintains neutrality: To avoid any conflict of interest, an escrow officer or title company manages the account, ensuring that all parties involved in the transaction are treated fairly and impartially.
Recording fee’s and Taxes: .12% of sale price
- Mortgage recoding fee
- Lien release recording fee
- Transfer tax
Realtor Fee’s: 5%
Property Taxes: Whether this is a debit or credit depends on when the home is sold during the tax year, July 1st to the following June 30th, and if the tax installment has been paid. It is hard to generalize this number as there are many variables: HOA dues, Mello Roos fee’s and other special assessments that not all properties have. Generally, if you sell between July 1st and February 1st of the following year you will have a property tax bill as part of your closing costs. If you sell between February 1st and June 30th, you will receive a credit from the buyer for property taxes you have already paid.
Here is a breakdown of costs for various selling prices. And don’t forget, this is only the cost of selling breakdown, you still have to subtract whatever is owed to the mortgage company for loan payoff to get your ‘Net’, i.e. how much you walk away with.
Remember, this is an estimate:
| Sale Price | Title Fee’s | Escrow Fee’s | Recording Fee’s | Realtor Fee’s | Total |
|---|---|---|---|---|---|
| $500,000 | $1,250 | $1,040 | $600 | $25,000 | $27,890 |
| $750,000 | $1,875 | $1,560 | $900 | $37,500 | $41,835 |
| $1,000,000 | $2,500 | $2,080 | $1,200 | $50,000 | $55,780 |
| $1,250,000 | $3,125 | $2,600 | $1,500 | $62,500 | $69,725 |
| $1,500,000 | $3,750 | $3,120 | $1,800 | $75,000 | $83,670 |
| $2,000,000 | $5,000 | $4,160 | $2,400 | $100,000 | $111,560 |