Seller Closing Costs info from Fran and Rowena - Southern California real estate


 
 

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Seller Closing Costs


Learn what seller closing costs are

and how they are paid.


Valuable information from www.FranandRowena.com
Southern California real estate agents Fran and Rowena

The sum of the fees associated with the selling (or buying) of a home is referred to as the "closing costs."  Certain fees are automatically assigned to either the buyer or the seller; other costs are either negotiable or dictated by local custom.  Closing costs in Southern California can vary depending on many factors such as purchase price, commission (typically paid by the seller), and the location.  The practice of who typically pays for certain closing costs varies by geographical area in the state of California, and in fact, throughout the country.

It is important to understand what you are obligated to pay for under the Purchase Agreement.  Make sure you read the Purchase Agreement carefully!  Ask your Realtor® for a copy of the Purchase Agreement before you receive an offer on your property, so that you have time to review the Purchase Agreement and clarify any questions you might have with the appropriate professional.



What are the typical Seller closing costs? [1]

seller closing costs Some typical seller closing costs in Southern California may include the following. Note:  what party pays for some of these costs may be negotiable under the Purchase Agreement, and not mandatory to be paid by either the buyer or seller.

  • If the seller has not yet paid for the house in full, the seller's most important closing cost is satisfying the remaining balance of their loan. Before the date of closing, the escrow officer will contact the seller's lender to verify the amount needed to close out the loan. Then, along with any other fees, the original loan will be paid for at the closing before the seller receives any proceeds from the sale.
  • Broker's commission
  • Transfer taxes (state and local)
  • Documentary Stamps on the Deed
  • Title insurance, seller's portion
  • Seller's portion of the escrow holder's fee
  • City and/or county inspection, including water conservation certificate (applies in certain areas only)
  • Homeowner's association transfer fee and fee to provide documents
  • Homeowner's association dues (prorated)
  • Pest control inspection and work to be done for clearance
  • Property taxes (prorated) - read further information below
  • Home warranty plan (aka home protection plan)
  • Gas earthquake safety shut-off valve (applies in certain areas only)
  • Other fees as per the Purchase Agreement
  • Miscellaneous fees (notary fees, sub-escrow fee, messenger fees, etc.)

Can you negotiate who pays for closing costs?

In addition to the sales price, buyers and sellers frequently include closing costs in their negotiations. 

If a buyer does not have the cash for the down payment and the closing costs, then the buyer may offer to pay a certain price for the property in return for the seller paying some or all of the allowable closing costs.  Ask your real estate agent for guidance when you are negotiating, and make sure that the terms are clearly written down on the Purchase Agreement.


How do prorations work?

At the closing, certain costs are often prorated (or distributed) between buyer and seller. The most common proration is for property taxes.  This is because of the property tax due date.  The seller is "charged" for that portion of the property taxes when they own the property, and the buyer's responsibility for the property taxes would typically start as of the date the buyer owns the property.  The escrow holder would use the most recent property tax bill and at the close of escrow, the escrow holder would prorate the amount due between the parties accordingly.


Understanding the property tax calendar - when are property taxes due?

Property taxes are due as follows in the state of California [2]:

The property tax year (fiscal year) is from July 1 to June 30.  Property is taxed as of January 1 for payment in the following fiscal year.  Property taxes are paid in two halves: July 1 to December 31, and January 1 to June 30.

The first half of regular secured property tax bill (covering the period from July 1 to December 31) is due November 1st, and delinquent if not paid by December 10th at 5 pm   (a postmark before midnight is considered timely).

The second half of the annual property taxes is due February 1st, and delinquent if not paid by April 10th at 5 pm (a postmark before midnight is considered timely).

(Note: If the delinquent date falls on a Saturday, Sunday, or government holiday, then the due date is the following business day.)


Do you have questions or comments?

Contact Fran and Rowena

Telephone:  (818) 952-0077

email Fran and Rowena

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[1] This is not intended to be a complete list of seller's closing costs.  Your actual seller fees may be different as negotiated in your contract. Read your Purchase Agreement and your lender's documents carefully and make sure you understand their terms. You may want to consult with an attorney, CPA and/or other legal or financial advisor. Please read our Disclaimer.
[2] Source: Los Angeles County Assessor's Office website: http://www.lacountyassessor.com/


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©Copyright 2003-2013 Southern California Real Estate.  All rights reserved.
Author:
Fran Vernon - of Fran and Rowena
By submitting any form on this site with your contact information including name, telephone number, address or e-mail address, you are consenting for Fran and Rowena and their authorized representatives to contact you even if your name is on the Federal "Do not call List".

NO part of this real estate website or its contents may be copied, reproduced, displayed, published or otherwise used for private or commercial purposes without the express, written permission of Fran and Rowena. The information contained in this website is believed to be reliable but is not guaranteed. We make every effort to maintain this real estate website to have current, accurate information. However, we cannot warrant the accuracy of the information contained in this website including, but is not limited to, information contained in this website and information contained in websites that are linked to this Southern California real estate website.



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