California Sellers: You’re on the Hook for These Closing Costs

California homeowners looking to upgrade from their starter home to more permanent digs may be surprised by the amount they’ll owe at the end of the sale: Closing costs in California typically range from 6% to 8% of the total home sale price.

“I always recommend that sellers reach out to a real estate agent to get an estimated settlement statement … so they can kind of get a ballpark on what those transfer costs are going to be,” advises Donny Piwowarski, a top real estate agent in Tracy, California who has sold close to 800 properties.

Step one: Talk to an expert!

Selling your house soon? Connect with a top agent near you to get an expert opinion on how much your house will sell for, what to fix before listing, and the latest local housing market trends.

Learn More

We spoke to Piwowarski about closing costs in California and what sellers are customarily on the hook for. Keep scrolling to find out how much you can expect to pay when you sell your house.

California sellers cover these closing costs

While some closing costs are negotiable, California home sellers almost always pay for the following eight closing costs:

1. Mortgage payoff

Nationally, the median duration of homeownership is just over 13 years. In California, this number trends higher when analyzing high-priced, major metro areas like Los Angeles (18.1 years), Oxnard (17 years), Anaheim (16.9 years), San Jose (16.7 years), and Oakland (16.2 years).

Considering that most mortgages have 15-year or 30-year terms, many California sellers must pay off their remaining mortgage when they sell their home. If your selling price is higher than the price you purchased it for, you’ll use the money from the sale to pay off your mortgage — and ideally pocket what’s left over!

2. Property taxes

Property taxes can be a dizzying closing cost to calculate due to how they are billed. Property taxes in California are due twice a year in November and February, and the seller is responsible for paying taxes up until the closing date. Piwowarski provides a hypothetical example:

“If the property is going to close by the end of April, and let’s say the seller has already paid the April obligation for the property tax bill, they would get a credit for a portion of that. Then the buyer would get the remaining balance. It would get prorated at the closing table.”

The same is true of the opposite: If you sell your home in June, you cover property taxes up to June at the closing table.

The buyer’s lender typically calculates who owes what property taxes, but it’s a good thing to be aware of before sitting down at the closing table.

3. Loan reconveyance fee

Once you’ve paid the mortgage balance, you’ll receive a reconveyance deed as proof. Lenders typically charge around $50-$65 for this documentation — which, by the way, you’ll need to prove to the county that your lender no longer has claims to the property.

4. Reconveyance recording fee

The county’s recorder files the reconveyance deed in the county’s records. As compensation for their labor, county recorders charge a fee to record the reconveyance. In California, these fees range from $8 to $98 per title. You can find out what your county charges by clicking here.

5. California documentary transfer tax

In addition to property taxes, all home sellers in California pay a state documentary transfer tax. The state charges a tax on the transfer of real property titles at a rate of 55 cents per $500 of the closing cost. Since it is a state tax, it applies equally to transactions in every corner of California.

6. County transfer tax

County transfer taxes are yet another fee that sellers may have to pay at closing, depending on the property’s location. Counties leveraged these taxes on documents that grant, transfer, or convey real property.

Sound familiar? It should. These taxes are essentially the same as documentary transfer taxes, except that home sellers pay them to the county, not to the state. As such, the rate of taxation varies from county to county.

7. Real estate agent commission

The average agent commission in California is 5%–5.5%, split evenly between the buyer’s agent and the listing agent. The seller pays for both agents’ commissions. This can translate to a pretty penny when the median price for a single-family home is $819,740 (as of December 2023); 5.5% on a median-priced home could be as much as $45,086 out of the seller’s pocket at closing.

But Piwowarski says not to let this number scare you when you’re hiring an agent at the start of your home sale:

Trust us: You want a top agent at your side during your home sale. Data from HomeLight’s market research shows that the top 5% of real estate agents sell homes for 4.8% more than the average agent.

Find a top real estate agent near you

We analyze millions of home sales to find real estate agents that sell homes faster and for more money. It takes just two minutes to match you with your personalized recommendations.

Learn More

8. Escrow fee

Most know that when their sale is in escrow, they’re in the homestretch. But what exactly does that real estate jargon mean? Escrow is the limbo period between accepting an offer and closing. It’s when the buyer’s money and key paperwork enter into an escrow account — an impartial, third-party account that holds these items until the deal is complete. Escrow officially ends in closing when all funds have been disbursed.

In California, most home sales are finalized in escrow. The state does not regulate escrow fees, and they can vary from case to case based on the complexity of the transaction and the liability involved. Typically, companies charge a fee based on a percentage of the home sale price; however, some companies charge a flat rate.

Who pays for the fee, though, can depend on where in California your home is located. In southern California, the seller typically pays the fee, while in parts of northern California, it’s customary for buyers and sellers to split the fee. Discuss local protocol with your agent early on in the selling process to ensure you’re in the know.