How Much Are Closing Costs in California? (and How You Can Minimize Them)

October 3rd, 2023  / Author: Cesar Gomez
Home Sales

Are you thinking of selling your house? Then, you must be wondering – how much are closing costs in California? This is an important question to ask as these costs can make a significant dent in your profits. Which is why we wrote this article.

You will learn what closing costs are and how much sellers need to pay, on average, when closing a real estate transaction. More importantly, you will learn how you can avoid paying some or even all of the closing costs – because yes, they are avoidable. So let’s get to it.

What Are Closing Costs?

In simple terms, closing costs are all the fees that need to be paid at the closing of a real estate transaction in addition to the purchase price of the property. Both sellers and buyers have closing costs that they pay.

The average closing costs in California for sellers range between 0.8% to 6.8% of the purchase price of the property, if you include realtor fees for the second one. Yes, there is a very large difference between 0.8% and 6.8%, which is why we will break the costs down.

Typical Seller Closing Costs in California

First, we will deal with the typical closing costs sellers need to pay when the sale is over and the deal is closed. These closing costs need to be paid, i.e. they are non-negotiable. You will have to pay for:

  • Title search
  • Title insurance
  • Settlement fees
  • Transfer tax
  • Escrow fees
  • Recording fees

These are smaller fees that you will need to pay from the proceeds of the sale. The exact price of each fee varies depending on the county and the selling price of your home, but the total is usually between 0.8% - 1% of the selling price in California.

Thus, if you were to sell your home for $500,000, you can expect $4000 - $5000 of it to go towards paying the closing costs. However, while these fees need to be paid and are the seller’s responsibility, some buyers are willing to cover the costs to sweeten the deal.

Is the Capital Gains Tax Included in the Closing Costs?

No, the capital gains tax you need to pay when selling a property is not calculated as part of the closing costs. You may not need to pay anything or it can be a significant amount, depending on your specific situation. However, capital gains taxes are a complex subject that deserves an article of its own. Thus, read this to learn how capital gains taxes work and how you can avoid them.

Situation-Dependent Closing Costs

Besides the above-listed closing costs that are included in each sale, there are specific, situation-dependent seller closing costs that can significantly increase what you need to pay. On the good side, these are negotiable and depend on your specific situation. So, on top of the 0.8% - 1% that you will be paying, you also need to budget for:

Realtor Commissions

The seller pays the commission for both the buyer’s and seller’s agent. Realtor commissions are the single largest cost that you will need to pay when selling your house. Both agents usually charge between 2% - 3% of the sale price.

So, you will need to give 4% - 6% of the proceeds of the sale to the realtors. Thus, if you are selling a house in California, expect to dish out anywhere between $20,000 - $30,000 if your house is worth $500,000. That is, you will need to pay this if you are selling through agents, which you can avoid and we will discuss how you can do it later on.

Mortgage Balance Settlement

You need to pay off your mortgage before you can sell your house. Naturally, this also means that you can sell your house even if you don’t have 100% equity. The outstanding mortgage balance will be paid from escrow before you receive your money. Besides the remaining mortgage due to your lender, you additionally may need to pay:

  • a prepayment penalty
  • a loan payoff fee

Whether you need to pay these additional fees depends on the contract you signed when took out your mortgage. The conditions for paying off your mortgage ahead of time should be outlined in your mortgage contract. If you can’t find the contract or can’t find these provisions, it is always a good idea to contact your lender to make sure.

Property Taxes

Unlike other taxes, property taxes can be divided between the buyer and the seller in California – this is called property tax proration. You, as the seller, will need to pay the taxes for the time you’ve owned the house in a given calendar year before the sale is closed. So, if you sold the house on the 1st of September, you’ll need to pay 9 months of property taxes.


An additional fee you may need to pay is the HOA transfer fee. Naturally, this depends on whether your house is part of an HOA or not. If it is, you will need to pay for the transfer documents and registration of your buyer as the new owner of the property. These fees usually amount to less than $1,000.


Finally, we get to the concession you make to the buyer. These closing costs purely depend on what you (or your agents) negotiate. A seller’s concession can be anything from paying for repairs to covering the buyer’s closing costs. Thus, how much you will need to pay varies greatly.

Conversely, buyers may also make concessions to the seller, where they agree to pay certain fees that you would typically need to do personally. It all depends on what you agree to. In the current state of the real estate market in California, buyers are more likely to make concessions to you than the other way around, as it is a seller’s market.

The Key Points of a Seller’s Closing Costs

The closings cost you need to pay will depend on your situation, but here are the three main points you should remember:

  • You will typically pay at least 0.8% to 1% of your home’s purchase price in closing costs.
  • Sellers traditionally pay realtor commissions, which are between 4% - 6% of the purchase price in California. You can avoid these costs by selling without realtors.
  • Who pays the closing costs is negotiable in California and buyers may be willing to make concessions to cover some of the fees.

Sell Your House Without Paying Closing Costs

How much are closing costs in California? As you can see, a lot. But you don’t have to pay them. SleeveUp Homes will buy your house for cash and pay top dollar. We will cover all closing costs, so you get to keep 100% of the proceeds. We are direct buyers and don’t work with realtors, so there are no commissions.

But you don’t need to make a decision straight away – contact us to get a no-obligation cash offer and see how much you can get for your house.



If you want to sell fast and are worried about how long the traditional process takes, and the commission and fees involved, consider working with SleeveUp Homes.