What are Closing Costs?

The term closing costs refers to the fees and charges that the buyer and the seller are required to pay for at the closing, or settlement, of a real estate transaction. Generally, the buyer is responsible for most of the closing costs. However, in some instances, the buyer may convince the seller to shoulder some or all of the costs. These fees and charges differ by state and municipality, so a homebuyer would benefit from working with a qualified and experienced real estate professional who can provide them with all the relevant information that would enable them to negotiate and get the best deal out of their home purchase.

Average San Gabriel Valley, CA Buyer’s Closing Costs

Homebuyers in San Gabriel Valley, CA can expect to pay closing costs from 0% to 3% of the purchase price. Mortgage fees typically cost around 1% of the loan, but this can be reduced to zero by increasing the interest rate. Escrow fees in Southern California are around $250 plus $2.50 per $1,000 of the sales price; so, a $300,000 home would have an escrow fee of $1,000. While buyers can negotiate with the seller to purchase a one-year home warranty policy on their behalf, they would have to incur the cost if the seller refuses and the cost will range from $350 to $550.

The cost of fire insurance policies on average ranges from $600 to $1,000. If the buyer is getting a mortgage, the lender will require a home appraisal and this costs about $350 to $600, depending on the type of loan and the type of property. Credit check fee ranges from $20 to $35. The buyer is also responsible for the cost of a home inspection, which ranges from $250 to $500. Some of the miscellaneous fees that buyers may have to pay for are those for notary, loan document signing, processing, wire and delivery, endorsements or even sub-escrow, and these fees can range from $10 for each notary signature to a few hundred dollars for sub-escrow fees.

Average San Gabriel Valley, CA Seller’s Closing Costs

Home sellers in San Gabriel Valley, CA, in general, pay around 6% to 8% of the home purchase price in closing costs. The commission fees for the listing agent and buyer agent range from 1% to 8%, depending on service level, market cycle, and type of sale. Agent commissions are usually low in hot seller’s markets and higher in buyer’s markets. Full-service agreements tend to cost more compared to limited MLS-only services. Also, short sale agents typically charge more than standard sale agents.

The fees that sellers pay the escrow company that processes the home sale transaction cost around $250 plus $2.50 per $1,000 of the sales price. Sellers also purchase title insurance for the benefit of the buyer, in case of unforeseen liens after the sale, and this costs about 25% to 50% of the sales price. Transfer taxes in Los Angeles County is 0.11% of the sale price. The natural hazard disclosure report, which is required by law, costs around $90 to $125.

If the property is in an HOA, the buyer will have to request for HOA documents that contain information about the financial health of the HOA, and these would cost around $150 to $350. If the buyer agrees to purchase the one-year home warranty policy on behalf of the buyer, this would cost them around $350 to $550.

Breakdown of Closing Costs for Homebuyers in San Gabriel Valley, CA