California closings run through escrow, and who pays what follows local custom that differs between Southern and Northern California.
What is different in California
- Counties charge a documentary transfer tax of $1.10 per $1,000 of value; some cities, including Los Angeles and San Francisco, add their own, with higher rates on higher-priced sales.
- In much of Southern California, buyer and seller split escrow fees and the seller usually pays the owner’s title policy; in parts of Northern California the buyer pays more of these.
- After you buy, the county reassesses at the purchase price and sends a supplemental tax bill for the difference, which is separate from your escrow account at first.
- Insurance can be the hardest closing item in wildfire areas; start quotes early, and the state’s FAIR Plan is the fallback when private insurers decline.
- Earthquake coverage is separate from homeowners insurance and usually optional.
Questions
Who pays closing costs in California?
Both sides, by local custom: buyers pay lender charges and their share of escrow and title, sellers usually pay commissions and the transfer tax. The split differs by county, so your purchase contract sets it. See also: Mortgage loans in California.
How much are closing costs in California?
Often 2% to 5% of the price for a buyer, depending on the loan, the points and the prepaid taxes and insurance. The closing costs calculator lets you enter your own figures.
What is a supplemental tax bill?
A one-time bill after you buy, for the difference between the old assessed value and your purchase price for the rest of the tax year. Set money aside for it.
Related
- Closing costs and cash to close calculator
- Property tax rates in California
- Discount points vs lender credits
- Closing costs and cash to close calculator
- Mortgage payment calculator
Closing costs in other states: Arizona, Florida, Ohio. All of California: mortgage loans in California.
