Page 18 - California Home Buyers Handbook

06 Closing Costs

The buyer and seller will pay “closing” or settlement costs, an accumulation of separate
charges paid to different entities for the professional services associated with the buying
and selling of property.

Some closing costs might include real estate commissions, appraisal fees, loan fees, es-
crow charges, advance payments like property taxes (city and county), hazard insurance,
title insurance, pest inspections, etc.
Keep in mind that your closing funds should be in the form of a cashier’s check made
payable to the title company or escrow office in the amount requested, or by wired funds.
Examples of Additional Closing Costs:

Title insurance premiums Real estate commission
Escrow and notary fees Documentation preparation fee for transferred deed
Documentation preparation fee Fire insurance premium for first year impounds, if applicable
Payoff all loans in seller’s name (or existing loan balance if
Recording charges for all documents in buyer’s name
being assumed by buyer)
Interest on new loan from date of funding to 30 days prior to Interest accrued to lender being paid off, statement fees,
first payment reconveyance fees and any prepayment penalties
Inspection fees (property, roof, geological) Termite work (according to contract)
All new loan charges (except those required by lender for seller Natural hazard disclosure report
to pay)
Tax proration from date of acquisition Any judgments, delinquent taxes, tax liens, etc. against seller
Assumption/change of record fees for take over of existing loan Tax proration (for any unpaid taxes)
Recording charges to clear all documents of record against
Beneficiary statement fee for assumption of existing loan
seller
Homeowners association transfer fee Any bonds or assessments
Any unpaid homeowners dues, homeowners document and
Home warranty (according to contract)
demand fees
Any city transfer tax/conveyance tax (per custom)* Documentary transfer tax

(*Based on City/County of where property is located. Check with your Real Estate Professional.)
Common Property Taxes
City Transfer Tax:
Tax paid to the local government as a percentage of the property’s value. The amount
of the tax is usually based on a percentage of the property’s selling price, but the exact
amount is determined by the city where the property is located.
County Transfer Tax:
Tax paid to the county or local government as a percentage of the property’s value. The
amount of the tax is usually based on a percentage of the property’s selling price, but the
exact amount is determined by the county where the property is located.

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