• Skip to primary navigation
  • Skip to content
  • Skip to footer
(510) 847-0656Holly@HollyRoseHomes.com

Holly Rose

East Bay Realtor

  • About
    • Meet Holly
    • How I Work
    • Experience and Credentials
    • Territory
    • My Life Outside Real Estate
    • Quotes from Clients
  • Buy
    • How I Work with Buyers
    • Getting a Home Loan
    • How to Shop for a House in 4 Easy Steps
    • The Escrow Process
    • Co-Owning a House
    • Closing Costs
    • Costs of Ownership
  • Sell
    • How I Work with Sellers
    • General Timeline
    • Preparing Your Home for Sale
    • Real Estate Marketing Strategy
    • The Escrow Process
    • Closing Costs
  • Blog
    • Real Estate Classroom
    • East Bay Living
    • Inspiration
    • East Bay Architecture
    • Case Studies
    • My Favorite Tradespeople
    • Press
  • Testimonials
  • Contact
You are here: Home / Closing Costs

Closing Costs

Closing costs are the expenses associated with buying or selling a home, excluding the cost of the home itself. For Buyers, I recommend budgeting about 3 % of the purchase price for closing costs, and for Sellers, about 7% of the sales price. Typical closing costs for the East Bay Area are explained below.

Who Pays What  |  More About Buyer Costs  |  More About Seller Costs

“I have hired realtors before…Holly Rose is one of only a very few realtors who can bring to the table deep experience, insight, and planning skills in combination with a whole lot of interest and joy in making you, and your house, the center of the universe.”
— Jean J

Who Pays What

The Buyer customarily pays:

  • Loan fees
  • Title insurance policy premiums (lender’s and buyer’s)
  • Escrow fee
  • Notary fee
  • Annual property tax proration (from date of purchase onward)
  • Homeowner’s association transfer fee, if required
  • Home Warranty plan
  • One-half of City transfer tax
  • Fire (hazard) insurance premium for the first year
  • Pro-rated interest on new home loan

The Seller customarily pays:

  • Real estate commission
  • Documentary (county) transfer tax
  • Annual property tax proration (up to date of purchase)
  • One half of City transfer tax
  • Any outstanding liens or loans secured by the property (such as a mortgage)

 

For Buyers

Loan Fees

Points

Points are one-time-only fees you may elect to pay to a lender up front in exchange for a lower rate on your mortgage. One point is one percent of the amount of your new loan. Depending on your particular situation, you may choose anything from a zero point loan to a two point loan. The points on your new loan, if any, are due at close of escrow.

Appraisal

The cost of the appraisal is sometimes charged to you by your lender at the beginning of escrow, when the appraisal is ordered. However, if you have not paid it in advance, it will be due at close of escrow. A typical appraisal fee is $300 – $500, depending on the property.

Credit Report

Usually in the range of $25 – $70, depending on number of borrowers.

Processing fee

Sometimes called an underwriting fee. Depending on the loan you choose, this fee may be anywhere from $400 – $800.

Pre-paid interest

Usually, the lender will charge you interest only (as opposed to principal plus interest) on your new loan, pro-rated from the close of escrow through the end of that month, due upon close of escrow.

Escrow Fee

People often erroneously use the term “escrow fees” when they mean “closing costs.” In fact, there is only one escrow fee, which is one of your many different closing costs. The escrow fee is the fee charged by the escrow company to handle your escrow. It is calculated based on the price of the home, and typically is in the range of $900.

Title Insurance

Your lender will require you to obtain title insurance, which protects your ownership (title) of the property against other, previously recorded liens. There is one policy which protects you, and a second policy that protects the lender, but guess what? The lender makes you pay for them both. A typical owner’s policy costs $1700 – $3600, while a typical lender’s policy costs $600 – $1100.

Miscellaneous Charges

The title company will charge several small, itemized fees to cover things like document preparation, courier, wire transfer, notary, and recording. All of these fees combined generally total around $350 – $500.

Transfer Tax

At transfer of title (close of escrow), depending on location, there may be a one-time only transfer tax charged by the city and county. It is customary for the seller to pay the county tax, and for the seller and buyer to split equally the city tax (if any).

Alameda/Contra Costa County Tax $1.10 per $1,000 of sales price
Piedmont city tax 1.3% of sales price
Oakland city tax 1.0% to 2.5% of sales price
Berkeley city tax 1.5% to 2.5% of sales price
Albany city tax 1.15% of sales price
Kensington city tax No city transfer tax
El Cerrito city tax 1.2% of sales price

Pro-rated Annual Property Tax

Annual property taxes are a pro-rated closing cost. If the seller has already paid the tax installment, you will credit them for that period of your ownership which has been prepaid. If the installment is due, but not yet paid, the seller will credit you for the period up to the close of escrow, and you will pay the installment.

Hazard (Fire) Insurance

Sometimes called fire insurance, the lender requires that you pay an entire year’s premium up front. Typical annual hazard insurance premiums are in the range of $800 – $2,500.

Example of a Typical Buyer’s Settlement Sheet

Purchase price 1,500,000
Initial deposit (3% of purchase price) 45,000
New loan 1,000,000
Lender charges
Points (0.25 x 1,000,000) 2,500
Processing 750
Appraisal 500
Credit Report 50
Interest on loan: 15 days at 4.25% 1,771
Subtotal 5,571 
Escrow charges
Fire Hazard Insurance 1,200
Prorated annual property taxes 615
Escrow fee 1,800
Title insurance (owner’s policy) 3,000
Title insurance (lender’s policy) 1,000
Recording, document prep, courier, notary etc. 400
City Transfer Tax (one-half of total tax) 11,250
Subtotal 19,265
Remainder of down payment
($500,000 minus $45,000 deposit)
455,000
Total due on closing
(purchase price, minus deposits, + closing costs)
1,024,836

 

 

For Sellers

Sellers have far fewer closing costs than buyers, but the costs they do have are the biggies: mortgage and commission. The escrow officer receives funds from the buyer and buyer’s lender, including down payment and new mortgage, and uses these funds to pay off your mortgage, other outstanding liens such as property taxes, and any other costs of sale.

Mortgage Pay-Off

After escrow is opened, the escrow officer will contact your lender to get a current figure for the amount outstanding on your home loan(s), pro-rated as of the close of escrow. The entire amount must be paid off before title may transfer out of your name.

Real Estate Fee (Commission)

This commission (generally 6% of the sales price) is split equally between the listing brokerage (representing you, the seller) and the brokerage representing the buyer. Within each brokerage, it is split between the company (or office) and the agent. The agent then pays her own taxes, overhead, assistant, etc. So when you pay that big fee, you are actually paying a whole chain of people involved in the sale of your home, not just your own agent.

Prorated Annual Property Tax

If your annual tax bill is due but not yet paid, you will be charged (pro-rated) through escrow.

Transfer Tax

At transfer of title (close of escrow), depending on location, there may be a one-time only transfer tax charged by the city and county. It is customary for the seller to pay the county tax, and for the seller and buyer to split equally the city tax (if any).

Alameda/Contra Costa County tax $1.10 per $1,000 of sales pric.
Piedmont city tax 1.3% of sales price
Oakland city tax 1.5% of sales price
Berkeley city tax 1.5% of sales price
Albany city tax 1.15% of sales price
Kensington city tax No city transfer tax
El Cerrito city tax No city transfer tax

Miscellaneous Closing Costs

The title company will charge several small, itemized fees to cover things like document preparation, courier, wire transfer, notary, and recording. All of these fees combined generally total around $350 – $500.

Overall, I recommend you assume about 7% of the sales price will be diverted to closing costs. When an offer is accepted on your property and I open an escrow, I will prepare a detailed list of your own closing costs, based on information provided by you and the title company. Below is a sample summary of seller’s costs:

Example of a Typical Seller’s Settlement Sheet

Sales price 1,500,000
Real Estate Commission (6%) 90,000
Pay off existing loans 525,000
Prorated annual property taxes 1,257
Processing, courier, recording, etc. 300
County Transfer Tax 1,650
City Transfer Tax (one-half of total tax) 11,250
Subtotal 629,457
Estimated total due to Seller at closing 870,543

Now that you know what it costs to buy a house, learn about the costs of owning a house.

Footer

Holly RoseHello, I’m Holly Rose. I help people buy and sell homes in the East Bay. I specialize in fine old homes with interesting or historically significant architecture.

I have been a top-ranked residential Realtor for 25+ years. I am deeply connected to our local community, and I love my work. Most of my clients come to me through word-of-mouth referral. Let’s talk.

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

© 2023 · Holly Rose Homes