In the past two years due to the epidemic, people's demand for buying and replacing houses has increased, and housing prices have risen sharply. It is a good time to sell a house. In this article, I will give you a general idea about the expenses involved in selling a house in the Bay Area of California.
Generally speaking, when selling a house in California, expenses are mainly divided into the following six categories:
First of all, let's talk about the Escrow fee. Here we have to mention a very important neutral party in the transaction: the Escrow company. Simply put, the responsibility of this neutral third party is to ensure that both the buyer and the seller fully perform the contract. The deposit, down payment, loan documents, etc. should be handed over to Escrow, and the seller signs and hands over the transfer documents to Escrow. Escrow protects the interests of both parties in the transaction. Therefore, the Escrow company charges a certain fee.
In different counties in California, who pays the Escrow fee is also different. For example, in Santa Clara in the Bay Area, the seller pays the escrow fee; in Alameda County and San Mateo, the buyer pays; and in Los Angeles and Orange County, the buyer and seller each pay 50%, depending on the county where the house is located.
Next, let's talk about title insurance. This insurance can protect the buyer from other people claiming ownership of the property after the transaction is completed. It can also prevent potential unpaid debts owed by the seller from being passed on to the buyer after the home is sold. So title insurance is very important.
Generally speaking, there are two types of title insurance. One is the owner's title insurance policy. You may ask who pays for this insurance. Different counties have different regulations. For example, in Santa Clara, the seller pays, while in Alameda county and San Mateo, the buyer pays. The second is Buyer's Lender title insurance policy, that is, if the buyer has a loan, this insurance protects the lender, so the insurance is paid by the buyer.
The next two items, County transfer taxes and city transfer taxes, can be collectively referred to as documentary transfer taxes. To put it simply, when a property is transferred, the government needs a share of the tax. Every county will have county transfer taxes, but not every city has city transfer taxes. For example, in Santa Clara county, three cities, San Jose, Palo Alto and Mountain View, have city transfer taxes. Tax rates are also different. It depends on the city where the house is located.
The last two items are some other fees and agency fees. Some other expenses include the cost of various house inspections, such as home inspection fees, termite inspection fees, NHD reports (natural hazard disclosure report fees), etc.; If HOA is invloved, there are also HOA document fees, and some other fees, for example, notary fees, recording fees, etc.
Before the house is put on the market, some preparation work may needs to be done, such as deep cleaning, prefessional photography, and staging, etc. The price also ranges from a few hundred to a few thousand, and I will do it for free for my clients.
The above are the six major expenses of selling a house in the Bay Area. The specific amount will be estimated based on the county and city where your house is located. If you have a need to sell a house, you may wish to contact me quickly. I will give you a detailed estimate of the house selling expenses based on the situation of your property. The market is changing rapidly now, so I will help you make plans in advance.
