Who Pays for What in a Transaction?

So I often get asked by both buyers and sellers. Who pays for what? What will my closing costs be? The answer to that can vary but there are costs that traditionally paid for by the seller and costs that are traditionally paid for by the buyer.

The SELLER Generally Pays:

  • Real estate commission
  • Document preparation fee for deed
  • Documentary transfer tax
  • Any city transfer/conveyance tax (according to contract)
  • Payoff of all loans in seller’s name (or existing loan balance if being assumed by buyer)
  • Interest accrued to lender being paid off, statement fees, reconveyance fees and any prepayment penalties
  • Termite inspection (according to contract)
  • Termite work (according to contract)
  • Home Warranty (according to the contract)
  • Any judgments, tax liens, etc., against the seller
  • Tax proration for any taxes unpaid at the time of transfer of title
  • Any unpaid homeowner’s insurance
  • Recording charges to clear all documents of record against seller
  • Any bonds or assessments (according to contract)
  • Any and all delinquent taxes
  • Notary fees
  • Escrow fees
  • Title insurance premium

The Buyer Generally pays:

  • Title insurance premium
  • Escrow fee
  • Document preparation (if applicable)
  • Notary fees
  • Recording charges for all documents in buyer’s name
  • Termite inspection (according to contract)
  • Tax proration (from date of acquisition)
  • Homeowner’s transfer fee
  • All new loan charges (except those required by lender for seller to pay if applicable)
  • Interest on new loan from date of funding to 30 days prior to first payment date
  • Assumption/charge of records fees for takeover of existing loan
  • Inspection fees (roofing, property inspection, geological, etc.)
  • City transfer/conveyance tax (according to contract)
  • File insurance premium for first year

Remember that these costs are what you can generally expect in a typical escrow but they are not set in stone. The entire process begins with an offer on a contract, which is then negotiated between the buyer and seller, so many of the above fees could end up the responsibility of the other party.

Calabasas and Westside real estate and homes for sale

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