In California, who pays which closing costs isn't set by state law. It's set by local custom, and the custom changes from county to county. The same $1.2 million sale can leave the buyer or the seller paying thousands more depending on which side of the Bay it's on.
Everything below is custom, not a rule. It's all negotiable in the purchase contract.
The three big items
Escrow fees. The neutral company that holds the money and documents and closes the deal.
Owner's title insurance. The policy that protects the buyer's ownership. The lender's policy, required if you have a mortgage, is almost always paid by the buyer.
Documentary transfer tax. A tax on the sale. Every county charges $1.10 per $1,000 of the price. Some cities add their own, and some of those are much larger.
How it usually splits
Based on the customary practices published by Old Republic Title:
| County | Escrow | Owner's title policy | County transfer tax |
|---|---|---|---|
| Los Angeles, Orange, San Diego | Split 50/50 | Seller | Seller |
| San Francisco | Split 50/50 | Seller | Seller |
| Santa Clara | Seller | Seller | Seller |
| Alameda, Contra Costa, San Mateo, Marin | Buyer | Buyer | Seller |
| Sacramento, Placer | Split 50/50 | Seller | Seller |
The big surprise for people moving around the state: in much of the East Bay and the Peninsula, the buyer customarily pays escrow and the owner's title policy, while in Southern California the seller pays for title.
City transfer taxes
This is where the numbers get large. On top of the county tax, some cities charge their own transfer tax, and a few charge a lot more on higher-priced sales. San Francisco, Oakland, Berkeley, and the City of Los Angeles are among them. Los Angeles also adds Measure ULA on sales above a threshold that's adjusted each year.
Who pays a city transfer tax is also a matter of local custom and varies by city. Check the specific city before you price a sale or write an offer.
Other costs
- Buyers usually pay loan costs, the lender's title policy, appraisal, inspections, and prorated property taxes and HOA dues.
- Sellers usually pay any liens and payoffs, the listing brokerage fee, and any buyer-broker fee they agree to offer.
- Both may pay HOA transfer or document fees, depending on the association and the contract.
Where Arrivva fits
Our fees are flat. Sellers pay $15,750, and buyers pay $9,750, with the rest of the buyer-broker fee rebated to the buyer. When we write or review an offer, we map every closing cost by county and city so there are no surprises on the settlement statement.
Fred keeps a county-by-county list of who pays what. Download it here.