Here’s a quick breakdown of what buyers and sellers should expect to pay in closing costs during a home sale.
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Whether you’re buying or selling a home, what should you expect to pay in closing costs? That amount depends on three factors: the value of the home, its location, and whether it’s a new or existing home.
What’s included in these costs? On the seller side, you’ll have to pay title insurance. The county transfer tax in Silicon Valley is also usually paid by the seller, but the city transfer tax varies according to the city. If the house is in San Jose, the city transfer tax is split 50/50 between the buyer and seller. If the house is in Santa Clara, there is no city transfer tax.
Next, sellers will have to pay escrow fees and smaller items such as recording fees and prorations of the mortgage interest and property tax. Theoretically, these prorations don’t actually cost you when purchasing since you pay them anyway once you own the house, but they still show up on the settlement statement.
“Paying customs, of course, vary by county.”
On the buyer side, you’ll have to pay some escrow fees as well, and your lender usually requires you to get title insurance when applying for a loan. Additionally, when you buy a new construction home, the builder usually requires you to pay the seller’s closing costs in addition to your own.
Paying customs, of course, vary by county. If you buy in Alameda County instead of, say, Santa Clara County, you’ll have to pay all of the escrow fees and title insurance. If you buy in Santa Clara, the seller pays these fees. Also, remember that everything is negotiable.
If you’re thinking of buying soon, give me a call and I’d be happy to have an escrow officer give you an itemized breakdown of your expected closing costs. If you have any other questions about this topic, feel free to reach out to me as well. I’d love to help you.
