What Are Closing Costs When Buying a Home in California?
What Are Closing Costs When Buying a Home in California?
Your Questions Answered | The GO Team Real Estate
Closing costs are the fees and prepaid expenses you pay to complete a home purchase — separate from your down payment. In California, buyers typically pay between 2% and 3% of the purchase price in closing costs. On a $650,000 home, that's roughly $13,000 to $19,500. It's one of those numbers that surprises first-time buyers, so let me break down what you're actually paying for.
What's Included in Closing Costs
Closing costs aren't one thing — they're a collection of different charges. Escrow fees: In California, most transactions close through an escrow company. Buyer's portion typically runs $1,500-$3,000. Title insurance: You'll pay for a lender's title policy (required) and an owner's title policy. Together these can run $1,500-$3,000. Lender fees: Origination fee, underwriting fee, and possibly discount points. Appraisal: Usually $500-$900, required by the lender. Prepaid items: This category surprises people — you'll prepay homeowners insurance, property taxes, and prepaid interest. These are real costs, often $3,000-$6,000, that get lumped into closing.
Who Pays What in California
California doesn't have a single hard rule about who pays which closing costs. Many are negotiable. Sellers in California traditionally pay for the owner's title policy and real estate commissions. Buyers pay their own loan costs, the lender's title policy, and escrow fees (though this is often split). In some markets, buyers negotiate seller concessions — asking the seller to cover a portion of closing costs. In a competitive, multiple-offer situation, asking for concessions can make your offer less competitive.
How to Reduce Your Closing Costs
Shop your lender. Getting quotes from two or three lenders on the same type of loan lets you compare actual costs. Some down payment assistance programs help with closing costs, not just the down payment. CalHFA's MyHome program, for example, can be used toward closing costs as well as the down payment. Ask about a lender credit — some lenders will offer a higher interest rate in exchange for a credit toward your closing costs. Time your closing date — closing late in the month reduces prepaid interest. Your lender is required to give you a Loan Estimate within three business days of your application, which breaks down all expected closing costs in detail.
Questions About Your Specific Situation?
Every buyer's situation is different. Reach out to The GO Team Real Estate Services and let's figure out exactly where you stand and what's possible for you.
THE GO TEAM / REAL ESTATE SERVICES
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