When you buy a house/condo, etc. there is already a bit of sticker shock, so all those little added fees that come up at sign off, can be a bit of a surprise. So, here is a breakdown of what you should expect to see when you buy or sell a house or condo and who typically pays for them. Fees break down into Lender, Title/Escrow, Broker and City/County categories.
Buyers typically pay for all lender fees which could include: Application fees, property appraisal, “points” if included (“points” may be paid by the borrower up front to receive a more favorable interest rate from the bank), Underwriting fees, etc. Typically, these fees run in the $2-3000 range plus optional “points”.
Title and Escrow:
In Northern California, these 2 services are managed by the same companies…typically called the “Title Company”.
Escrow fees for the managing of the transfer of ownership from Seller to Buyer and money from Buyer to Seller are typically fixed and run around $2000.
Title Fees cover the cost of Title research and the issuance of Title Insurance for the new homeowner (The Buyer) and their lender (if there is one). These fees are based on the value of the property and range up from a few thousand dollars. If there is a loan involved in the transaction, there will be 2 Title Insurance policies: one for the new owner and one for the new owner’s lender. These are one time fees and stay in effect for as long as you own your home.
In Santa Clara County, the Seller pays for Title and Escrow (Buyer pays for Buyer’s lender’s Title insurance). In San Mateo County, the Buyer pays all Title and Escrow fees.
There may also be fees for recording of documents, Notary Fees, document mailing, paying off old loans, etc.
The Seller typically pays the Listing Broker for all commissions. From those fees, the Listing Broker distributes a portion to the listing agent and the Buyer’s Broker (who then pays a portion to the Buyer’s Agent).
City or County Fees:
Some cities charge transfer taxes that are based on the purchase price. For instance, both Mountain View and San Jose charge $3.30/thousand dollars. These fees are usually split 50-50 between Buyers and Sellers.
Both Santa Clara and San Mateo Counties charge a Document fee of $1.10/thousand dollars which is usually paid by the Seller.
Owen Halliday is a REALTOR who manages the Sereno Group Real Estate office in downtown Los Altos. If you have a subject you’d like addressed in a future column, Owen can be reached at firstname.lastname@example.org or 650-492-0062.