Typical Fees and Taxes Paid for a Real Estate Sale

When selling a home, both buyers and sellers incur various costs, which can vary depending on the location and the negotiated terms in the Purchase Agreement. Below are common fees and taxes typical to Santa Clara County, though most fees are negotiable.

Buyer's Charges:

  • Lender's Title Insurance Policy: Protects the lender’s interest in the property.

  • City Transfer Tax: In the cities of San Jose, Palo Alto, and Mountain View, this is usually $3.30 per $1,000 of the sales price, often split 50/50 between buyer and seller.

  • Recording Fees: For the deed and deed of trust to be officially recorded.

  • Notary Fees: Charges for notarizing important transaction documents.

  • Drawing Fees: For preparing the deed, private notes, and deeds of trust.

  • Lender’s Fees: This may include loan origination fees, appraisal fees, credit reports, tax service fees, prepaid interest, processing fees, and document preparation fees.

  • First Year Fire Insurance Premium: Required by the lender to protect the property.

  • Inspections:

    • Termite Inspection: Evaluates potential termite damage or infestations.

    • Roof Inspection: Assesses the condition of the roof.

    • Property Inspection: Provides a thorough review of the property's condition.

  • Proration of Real Estate Taxes: Buyer pays a proportionate share of property taxes for the time they will own the property in the tax period.

Seller's Charges:

  • Owner’s Title Insurance Policy: Ensures the buyer has clear ownership of the property.

  • Documentary Transfer Tax:

    • County Tax: $1.00 per $1,000 of the sales price.

    • City Tax: In San Jose, Palo Alto, and Mountain View, this is also $3.30 per $1,000 of the sales price (typically split 50/50 between buyer and seller).

  • Escrow Fee: The fee charged by the escrow company for handling the sale process.

  • Proration of Real Estate Taxes: Seller pays their share of property taxes up until the sale date.

  • Drawing Fees: For drawing up documents related to the transaction.

  • Notary Fees: Charges for notarizing the seller’s documents.

  • Recording Fees: Includes the cost of recording the reconveyance (proof that the seller's loan has been paid off).

  • Real Estate Commission: The seller typically pays the commission for both the buyer’s and seller’s agents.

  • Home Warranty Contract: Optional, but sellers often pay for a home warranty to provide peace of mind to the buyer.

  • Environmental/Geological Reports: Reports addressing environmental risks or geological concerns.

  • Termite Repairs: If needed, the seller may be responsible for termite damage repair costs.

  • Payoff of Existing Loans: This includes the remaining balance on the mortgage, interest accrued, and any related fees such as a statement fee or reconveyance fee.

Who Pays What?

The responsibility for these costs, especially for escrow fees, title fees, and transfer taxes, can vary based on city norms and what is negotiated in the agreement. Here's an overview:

  • Escrow Fees: Typically split 50/50 between buyer and seller.

  • Title Fees: The buyer often pays for the lender’s title insurance, while the seller usually pays for the owner’s title insurance policy.

  • Transfer Taxes: These taxes are typically split between buyer and seller.

For a detailed table of California closing costs for local counties, consult with your real estate agent or escrow officer to see what is customary in your area.

California Closing Costs (click here)