In Los Angeles, closing costs are typically divided between the buyer and the seller, though many fees are negotiable. Buyers generally pay 2% to 5% of the purchase price, primarily for loan-related expenses. Sellers typically pay 5% to 10%, with the largest portion going toward real estate agent commissions.
Common Buyer Closing Costs
Buyers in Los Angeles usually pay out-of-pocket for fees related to securing a mortgage and performing due diligence.
- Lender Fees: Includes loan origination (often 0.5% to 1% of the loan amount), underwriting ($300–$800), and credit reports.
- Appraisal: Professional property valuations by an appraiser, often required by a lender ($500–$1,000)
- Home Inspections: General home inspection plus specialized inspectors, such as termite, sewer, roof, mold/moisture, pool, foundation ($400–$2000).
- Prepaid Items: Upfront funding for property taxes (often 3 to 8 months worth), homeowners insurance, and prepaid mortgage interest.
- Title: Buyers typically pay for the Lender’s Title Insurance policy.
- Escrow fees: Typically buyers and sellers split the escrow company’s fees.
Common Seller Closing Costs
Sellers’ costs are usually deducted from their sale proceeds rather than paid as upfront cash.
- Agent Commissions: Historically 5% to 6%, though this is negotiable since mid-2024.
- Owner’s Title Insurance: It is customary in Los Angeles County for the seller to pay for the buyer’s owner’s title policy.
- Escrow fees: Typically buyers and sellers split the escrow company’s fees.
- Transfer Taxes:
- County Tax: $1.10 per $1,000 of property value.
- City Tax: The City of Los Angeles charges an additional $4.50 per $1,000.
- Measure ULA: For high-value properties in the City of LA (effective April 2023), an additional 4% tax applies to sales over $5.3 million and 5.5% for those $10.6 million or more (thresholds adjusted annually).
- Measure GS: The City of Santa Monica also has a similar transfer tax on high-value properties: 5.6% on properties priced $8 million or higher.
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Standard Cost Breakdown (Estimates)
Party Typical Range Primary Responsibility Buyer 2% – 5% Loan origination, appraisal, inspections, lender’s title insurance, escrow fees Seller 5% – 10% Commissions, transfer taxes, owner’s title insurance, escrow fees Key Local Considerations
- Customs Vary by City: These cost breakdowns are the norm in Los Angeles County, but in other areas it may vary which side is expected to pay what costs.
- Condo Fees: Buying a condo typically adds $500 to $1,500 in HOA-related transfer fees and document preparation costs. The seller typically pays these fees, although the buyer may have to pay an HOA move-in fee.
- Negotiation: In a buyer’s market, you can request Seller Concessions (credits) to cover your closing costs, though lenders often cap these at 3% to 6% of the sale price depending on the loan type.
