Quick Answer
California buyers pay 2–5% of the purchase price in closing costs, while sellers pay 6–10% including commissions. On the state's 2026 median home price of $905,000, that translates to approximately $18,000–$45,000 for buyers and $54,000–$90,000 for sellers. These are among the highest dollar-amount closing costs in the nation, driven by California's elevated home values. What makes California uniquely complex is a patchwork of regional customs—who pays for title insurance, escrow, and transfer taxes shifts dramatically between Northern and Southern California.
Key Takeaways
- Buyer closing costs: 2–5% of purchase price ($18K–$45K on median home)
- Seller closing costs: 6–10% including commissions ($54K–$90K on median)
- NorCal custom: Buyer pays owner's title insurance and full escrow
- SoCal custom: Seller pays owner's title; escrow split 50/50
- Charter city transfer taxes: 26+ cities with rates up to 6% (SF $25M+, LA Measure ULA 5.5%)
- Insurance crisis: FAIR Plan premiums 2–3× standard rates; 7% of deals fell through in 2023
- CalHFA ZIP: 2–3% of loan as zero-interest closing cost assistance
- Post-NAR settlement: California commission rates now average 5.03% (below national 5.57%)
- Wire fraud: 47% of Q1 2025 transactions showed fraud indicators—always verify by phone
Why Trust This Guide? | Last Verified: February 8, 2026
- Primary sources: Stewart Title rate schedules (July 2025), California Association of Realtors, CoreLogic ClosingCorp data
- Transfer tax data: All 26+ charter city rates verified against Old Republic Title and First American PDFs
- Updated for 2026: Includes Measure ULA thresholds (July 2025), $40K SALT cap (OBBBA), NAR settlement impacts
- Cross-referenced: FBI IC3 wire fraud data, FAIR Plan enrollment figures, CalHFA program requirements
You've probably seen estimates that closing costs run "2–5% of the purchase price."
And while that's technically correct, it doesn't capture what makes California different. Between regional customs that flip costs between buyer and seller, charter city transfer taxes that can add $50,000+ to a sale, and an insurance crisis that's killing deals, your actual costs depend heavily on where in California you're buying.
Here's the deal:
In Southern California, the seller pays for the owner's title insurance policy. In the Bay Area, the buyer does. That single difference can shift $600–$700 from one party to the other. Escrow fees follow a similar split. And if you're buying in San Francisco, Los Angeles, Oakland, or any of the 26+ charter cities with elevated transfer taxes, the seller could face an additional $10,000–$100,000+ in taxes that simply don't exist in other parts of the state.
In this guide, I'll break down every cost—and show you exactly who pays what based on where you're transacting.
Part 1: Every Buyer Closing Cost Itemized
Loan Origination and Lender Fees
Loan origination fees in California typically run 0.5%–1% of the loan amount. On the state median (~$905,000 purchase with 20% down, yielding a ~$724,000 loan), that's $3,620–$7,240. This fee covers the lender's administrative costs for processing, underwriting, and funding the mortgage. No California regulation caps origination fees on conventional loans, making comparison shopping essential.
Appraisal fees average $500–$1,000 for single-family homes in California's major metros, running higher than the national average of $300–$500. Properties above $1 million may incur surcharges of $125+. Condominiums cost $700–$950 due to HOA and complex analysis requirements, while multi-unit properties (2–4 units) run $900–$1,150.
Credit report fees are a standard $30–$50 for a tri-merge report pulling from all three bureaus. Home inspection fees average $400–$700 statewide, with Bay Area inspections trending toward the $450–$650 range and specialized add-ons (termite $75–$325, mold $300–$600, sewer scope $210–$250) pushing total inspection costs to $800–$1,500 for thorough due diligence.
Title Insurance: NorCal vs SoCal Split
Title insurance is where California's regional customs create the most confusion. Lender's title insurance is always required and always paid by the buyer. When purchased concurrently with an owner's policy, it can cost as little as $110 (per Stewart Title's July 2025 California rate schedule); standalone, it runs $400–$700 for a loan in the $700,000 range.
Owner's title insurance costs approximately $0.75 per $1,000 of coverage—roughly $600–$680 on a $900,000 home. The critical question is who pays:
Who Pays Owner's Title Insurance?
- Southern California (seller pays): Los Angeles, Orange, San Diego, Riverside, San Bernardino, Santa Barbara, San Luis Obispo, Ventura counties
- Northern California (buyer pays): San Francisco, Alameda, Contra Costa, San Mateo, Marin, Sonoma, Napa, Solano, Mendocino, Lake counties
- Exception: Santa Clara County follows the SoCal pattern (seller pays) despite being in the Bay Area
- Seller pays: Sacramento, Placer, Fresno, Kern, Humboldt also follow seller-pays custom
Escrow Fees and the NorCal-SoCal Divide
Escrow fees follow a standard California formula: approximately $2 per $1,000 of purchase price plus a $250 base fee. On a $900,000 home, total escrow fees run roughly $2,050. Who pays this fee is the second major regional split:
| Region | Escrow Fee Custom |
|---|---|
| Southern California | Buyer and seller split 50/50 |
| Bay Area (SF, Alameda, Contra Costa, San Mateo, Marin, Sonoma, Napa, Solano) | Buyer pays full escrow fee |
| Sacramento, Central Valley, Central Coast | Generally split 50/50 |
| Ventura, San Benito, Sutter | Seller pays in full |
The escrow process itself differs by region. In Northern California, title insurance companies handle both title and escrow functions as an integrated service. In Southern California, independent escrow companies operate separately from title companies, resulting in two separate fee structures.
Prepaid Costs Add Thousands at Closing
Prepaid property taxes are calculated based on California's fiscal year (July 1–June 30). Property taxes are due in two installments: the first covers July 1–December 31 (due November 1), and the second covers January 1–June 30 (due February 1). Lenders typically require 2–6 months of prepaid taxes to fund the escrow impound account. With California's effective property tax rate of 1.1%–1.25% (including Prop 13 base + local bonds), prepaid taxes on a $900,000 home run $1,650–$5,625 depending on closing date.
California Insurance Crisis
Prepaid homeowners insurance has become one of the most volatile closing costs. The statewide average annual premium is approximately $1,300–$1,550, but properties in wildfire-prone areas face premiums of $3,000–$10,000+.
Seven of California's 12 largest insurers have paused or restricted new homeowners policies since 2022, including State Farm, Allstate, Farmers, and Nationwide. The FAIR Plan (California's insurer of last resort) has swelled to over 555,000 policies as of March 2025—nearly quadrupling since 2018—with premiums running 2–3× standard rates.
The California Association of Realtors reported that roughly 7% of real estate deals fell out of escrow in 2023 because buyers couldn't secure affordable coverage.
Private mortgage insurance (PMI) applies to conventional loans with less than 20% down. Rates range from 0.2%–2.0% annually based on credit score and loan-to-value ratio. A buyer with a 740 credit score putting 10% down on a $900,000 home ($810,000 loan, 90% LTV) would pay approximately $4,050–$5,265/year ($338–$439/month). Use our California Mortgage Calculator to see your estimated monthly payment including PMI, taxes, and insurance.
FHA and VA Loans: Unique Upfront Costs
FHA loans require an Upfront Mortgage Insurance Premium (UFMIP) of 1.75% of the base loan amount, payable at closing or financed into the loan. On a $700,000 FHA loan, that's $12,250. Annual MIP rates (current since March 2023) are 0.55% for the most common scenario. California's 2025 FHA loan limits reach $1,209,750 in high-cost areas.
VA loans charge a funding fee instead of ongoing mortgage insurance. For first-time use with zero down, the fee is 2.15% of the loan amount—$15,050 on a $700,000 loan. The fee drops to 1.50% with 5–9.99% down and 1.25% with 10%+ down. Veterans receiving VA disability compensation are exempt entirely.
| Loan Type | Upfront Cost | Example ($700K loan) |
|---|---|---|
| Conventional | None (PMI if <20% down) | $0 upfront |
| FHA | 1.75% UFMIP | $12,250 |
| VA (first use, 0% down) | 2.15% funding fee | $15,050 |
| VA (first use, 10%+ down) | 1.25% funding fee | $8,750 |
Recording, Notary, and Miscellaneous Fees
Recording fees follow a statewide base structure: $12 for the first page per title and $3 for each additional page, plus the SB2 fee of $75 per document (Building Homes and Jobs Act) and a $10 DA fraud fee. Total recording costs for a standard deed typically run $75–$150.
California law caps notary fees at $15 per signature for acknowledgments and jurats. However, real estate closings involve multiple documents, and mobile notary services charge unregulated travel fees, pushing total notary costs to $150–$300.
Wire transfer fees run $25–$50 for domestic wires. HOA transfer fees range from $200–$500, and under California Civil Code §4575, these are typically the seller's responsibility.
Part 2: Seller Closing Costs
Agent Commissions After the NAR Settlement
The August 2024 NAR settlement fundamentally changed how real estate commissions work. Sellers are no longer required to offer buyer-agent compensation through the MLS, and buyers must now sign written broker agreements before touring homes.
Despite predictions of dramatic declines, California's average total commission rate sits at approximately 5.03% as of September 2025 (per Clever Real Estate's survey of 96 CA agents), below the national average of 5.57%.
| Commission Component | Typical Rate | On $905K Median |
|---|---|---|
| Listing agent | 2.5%–3% | $22,625–$27,150 |
| Buyer's agent | 2%–2.5% | $18,100–$22,625 |
| Total | ~5.03% | ~$45,500 |
Documentary Transfer Tax: Statewide Baseline
California's standard documentary transfer tax is $1.10 per $1,000 of sale price ($0.55 per $500), authorized under Revenue and Taxation Code §11911. The seller pays in virtually every county by custom. On a $900,000 sale, the county transfer tax is $990.
But that's just the baseline.
Charter cities can and do impose their own additional transfer taxes, which is where costs escalate dramatically.
Charter City Transfer Taxes: Complete 2026 Rate Guide
California has 26+ charter cities with elevated transfer tax rates, many featuring tiered structures that impose significantly higher rates on expensive properties. All rates below are the city rate in addition to the county's $1.10 per $1,000.
| City | Rate Structure | Notes |
|---|---|---|
| San Francisco | 0.50% (<$250K) to 6.00% ($25M+) | Combined city-county; no separate county rate |
| Los Angeles | 0.45% base + Measure ULA: 4% ($5.3M+), 5.5% ($10.6M+) | ~$991M collected from ~1,400 transactions since April 2023 |
| Oakland | 1.0% (<$300K) to 2.5% ($5M+) | Four tiers |
| Berkeley | 1.5% (<$1.6M), 2.5% (above); Measure W adds tiers in 2027 | 3.0%–3.5% tiers effective Jan 2027 |
| San Jose | 0.33% base + Measure E: 0.75%–1.5% above $2M | Three Measure E tiers |
| Santa Monica | 0.3% (<$5M), 0.6% ($5M–$8M), 5.6% ($8M+) | Sharp jump above $8M |
| Culver City | 0.45% (<$1.5M) to 4.0% ($10M+) | Progressive/marginal structure |
| Richmond | 0.7% (<$1M) to 3.0% ($10M+) | Four tiers |
San Francisco example: A $6 million sale in SF faces approximately $135,000 in transfer taxes alone (2.25% tier). In LA, that same sale would face ~$267,000 under Measure ULA.
Pending Statewide Threat
The Howard Jarvis Taxpayers Association is gathering signatures (deadline late February 2026) for a November 2026 ballot measure that would cap all charter city transfer taxes at $1.10 per $1,000—effectively eliminating every elevated rate. If it qualifies and passes, cities could lose up to $2 billion annually in existing revenue.
Get the California Closing Cost Cheatsheet
All 26+ city transfer tax rates, NorCal vs SoCal customs, and CalHFA programs in a printable 2-page PDF.
Download Free CheatsheetOther Seller Costs
Escrow fees follow the same formula as the buyer's side ($2 per $1,000 + $250); the seller's share depends on regional custom. Home warranties offered to buyers cost the seller $450–$700. Natural hazard disclosure reports cost $70–$100 and are legally required under Civil Code §1103.
Mortgage payoff costs include the payoff demand statement (capped at $30 under Civil Code §2943), reconveyance fees ($55–$165 including recording), and per-diem interest through closing day.
Part 3: County-by-County Customs Across All 58 Counties
The following table captures the prevailing customs for California's major county groupings. All customs are negotiable via the purchase contract.
| Region | Escrow Payment | Owner's Title Payment |
|---|---|---|
| Bay Area (SF, Alameda, Contra Costa, San Mateo, Marin, Sonoma, Napa, Solano) | Buyer pays | Buyer pays |
| Santa Clara County (exception) | Seller pays | Seller pays |
| Sacramento Region (Sacramento, Placer, El Dorado, Yolo) | Split 50/50 | Seller pays (Sacramento, Placer); Split (El Dorado, Yolo) |
| Central Valley (Fresno, Kern, Stanislaus, Tulare, Kings) | Split 50/50 | Seller pays |
| Southern California (LA, Orange, San Diego, Riverside, San Bernardino) | Split 50/50 | Seller pays |
| Central Coast (Ventura, Santa Barbara, SLO, Monterey) | Split 50/50 (Ventura: seller pays) | Seller pays |
| Rural Northern Counties | Split 50/50 | Split 50/50 |
Universal rule: Documentary transfer tax is always the seller's responsibility across all 58 counties by custom.
Part 4: Programs and Strategies That Cut Closing Costs
California offers more than 100 first-time homebuyer programs combining state, local, federal, and private assistance. Here are the programs specifically designed to help with closing costs:
CalHFA Programs: Zero- and Low-Interest Assistance
For a complete breakdown of all California Housing Finance Agency programs, see our CalHFA Down Payment Assistance Guide. Here's the quick summary for closing cost assistance:
CalPLUS FHA/Conventional + ZIP (Zero Interest Program) is the most direct closing cost assistance available. ZIP provides 2% or 3% of the first mortgage loan amount as a zero-interest deferred loan used exclusively for closing costs. No monthly payments required—the loan is due upon sale, refinance, or payoff.
| Program | Assistance Amount | Terms | Requirements |
|---|---|---|---|
| ZIP | 2–3% of loan | 0% deferred | 640 FHA / 680 conventional; first-time buyers |
| MyHome | 3–3.5% of price | 1% simple interest deferred | First-time buyers; county income limits |
| Dream For All | Up to 20% ($150K max) | Shared appreciation (15–20%) | First-time + first-generation; lottery Feb 2026 |
| GSFA Platinum | Up to 5.5% of loan | Various (forgivable after 3 years) | 640 credit; no first-time requirement |
Pro tip: GSFA Platinum has no first-time buyer requirement, making it available to repeat buyers—unlike all CalHFA programs. Use our California Program Finder to see which programs you qualify for based on your income and purchase price.
Seller Concessions and Lender Credits
Seller concession limits vary by loan type:
- Conventional: 3% (if <10% down), 6% (10–25% down), 9% (>25% down)
- FHA: 6% of purchase price
- VA: 4% of loan amount for non-standard costs, plus unlimited standard closing costs
- USDA: 6% of purchase price
Lender credits work in reverse to discount points: accepting a higher interest rate (typically 0.25% increase) generates credits worth roughly 1% of the loan amount toward closing costs. On a $700,000 loan, this yields ~$7,000 in credits. The break-even point falls between 3–7 years.
Closing at the end of the month reduces prepaid interest charges. At 7% on a $700,000 loan, per-diem interest is approximately $134/day. Closing on the 28th versus the 1st saves roughly $3,600 in upfront cash.
What You Can Shop For (TRID Rules)
- Shoppable: Title search, title insurance, settlement/escrow, pest inspection, notary
- Not shoppable: Appraisal, credit report, flood certification, tax monitoring
- Potential savings: $500–$1,500 by comparing title and escrow providers
Part 5: The Escrow Timeline and Wire Fraud Reality
California's standard escrow period runs 30–45 days for financed purchases, with the national average conventional mortgage closing at 41 days as of October 2025. Cash purchases can close in 7–21 days.
The Closing Disclosure 3-day rule requires the lender to deliver the CD at least three business days before loan signing. Three events trigger a new 3-day waiting period: an APR increase exceeding 1/8 of a percentage point, a loan product change, or a prepayment penalty addition.
Wire Fraud: A Severe and Growing Threat
The FBI reported $16.6 billion in total cybercrime losses in 2024, with real estate wire fraud estimated at $500 million. FundingShield data shows 47% of real estate transactions in Q1 2025 exhibited indicators of wire or title fraud—the highest level ever recorded. Deepfake incidents surged 700% in 2024–2025.
Never accept wire instructions received only via email. Always verify instructions by phone using an independently obtained number. Report suspected fraud to the FBI IC3 within 24–48 hours (the FBI's Recovery Asset Team successfully froze 71% of reported fraudulent wires in 2023).
Part 6: Tax Deductions—The SALT Cap Changed Everything
The $40,000 SALT Cap Reshapes California Deductions
The One Big Beautiful Bill Act (OBBBA), passed in 2025, dramatically expanded the state and local tax (SALT) deduction cap from $10,000 to $40,000 ($20,000 for married filing separately) for taxpayers with modified AGI under $500,000. The cap adjusts by 1% annually for inflation (2026 cap: $40,400).
This is transformative for California homeowners. A household earning $200,000 with $12,000 in state income taxes and $10,000 in property taxes previously lost $12,000 in deductions under the old cap. Under the new $40,000 cap, they can deduct the full $22,000.
| Closing Cost | Tax Deductible? |
|---|---|
| Mortgage interest | Yes (up to $750K loan balance) |
| Mortgage discount points | Yes (fully deductible year of purchase) |
| Property taxes (prepaid) | Yes (subject to SALT cap) |
| PMI premiums | Yes (starting tax year 2026 for AGI <$110K) |
| Title insurance, escrow, recording, transfer taxes | No (but add to cost basis) |
Part 7: How California Stacks Up
California's median single-family home price closed 2025 at approximately $850,680 (December 2025 CAR data) after peaking near $900,000 mid-year. CAR forecasts a 2026 median of $905,000, which would set a record.
2026 California Home Prices by Metro
- San Jose: ~$1.6 million
- San Francisco: ~$1.4 million
- Los Angeles County: ~$890,000
- Inland Empire: ~$630,000
- Sacramento: ~$480,000
As a percentage of purchase price, California buyer closing costs average 1%–2.1% excluding prepaids (per CoreLogic ClosingCorp and Rocket Mortgage data), which is actually below the national average of 1.8%–3.3%. But in raw dollars, California's costs are among the nation's highest simply because home prices are 2–2.5× the national median.
| Cost Category | Percentage | Dollar Amount (Median $905K) |
|---|---|---|
| Buyer closing costs (excl. prepaids) | 1%–2.1% | $9,000–$19,000 |
| Buyer total (incl. prepaids) | 2%–5% | $18,000–$45,000 |
| Seller closing costs (incl. commission) | ~7.7% | ~$70,000 |
Summary: What Matters Most for California Buyers and Sellers in 2026
Three Forces Reshaping Closing Costs
- Insurance crisis: FAIR Plan policies doubling or tripling premiums; Commissioner Lara's reforms likely pushing rates higher
- Expanded $40,000 SALT cap: Meaningful tax relief for middle-income California homeowners
- Howard Jarvis ballot initiative: Threatens to eliminate every elevated city transfer tax in the state
Key Actionable Insights
- California closing costs are far more negotiable than most participants realize
- Regional customs are defaults, not mandates
- CalHFA's ZIP program provides zero-interest closing cost assistance that most buyers don't know exists
- The 2024 NAR settlement means commission structures are now explicitly negotiable
Download the California Closing Cost Cheatsheet
Every city transfer tax rate, regional customs by county, and CalHFA program details—all in a printable 2-page PDF.
Get Free CheatsheetFrequently Asked Questions
How much are closing costs in California for a buyer?
California buyers typically pay 2–5% of the purchase price in closing costs, including prepaids. On the 2026 median home price of $905,000, that's approximately $18,000–$45,000. Excluding prepaids (taxes, insurance, escrow reserves), the range is 1–2.1%.
Who pays closing costs in California—buyer or seller?
Both parties pay closing costs, but the split varies by region and cost type. Sellers always pay transfer taxes and typically pay commissions (5–6%). In Southern California, sellers also pay owner's title insurance; in the Bay Area, buyers typically pay. Escrow is split 50/50 in SoCal but paid by the buyer in most of NorCal.
What is the documentary transfer tax in California?
The statewide rate is $1.10 per $1,000 of sale price ($990 on a $900,000 home). However, 26+ charter cities add their own transfer taxes, ranging from 0.22% (Riverside) to 6% in San Francisco for sales above $25 million and 5.5% in Los Angeles under Measure ULA for sales above $10.6 million.
Does the seller pay owner's title insurance in California?
It depends on the region. In Southern California (LA, Orange, San Diego, Riverside, San Bernardino, Santa Barbara, Ventura), the seller customarily pays. In the Bay Area (San Francisco, Alameda, Contra Costa, San Mateo, Marin), the buyer customarily pays. Santa Clara County is an exception—it follows the SoCal pattern despite being in the Bay Area.
What is CalHFA ZIP and how does it help with closing costs?
CalHFA ZIP (Zero Interest Program) provides 2% or 3% of the first mortgage loan amount as a zero-interest deferred loan used exclusively for closing costs. No monthly payments are required—the loan is due upon sale, refinance, or payoff. Available to first-time buyers with a 640+ credit score (FHA) or 680+ (conventional).
How do I reduce closing costs in California?
Key strategies include: (1) Use CalHFA ZIP or GSFA Platinum for assistance; (2) Negotiate seller concessions (up to 6% on FHA); (3) Accept lender credits in exchange for a higher rate; (4) Shop title and escrow services for $500–$1,500 savings; (5) Close at month-end to reduce prepaid interest; (6) Compare at least 3 lender Loan Estimates.
What is the average real estate commission in California after the NAR settlement?
As of September 2025, California's average total commission is approximately 5.03% (below the national average of 5.57%). Listing agents typically receive 2.5–3%, while buyer's agents receive 2–2.5%. Under the August 2024 NAR settlement, commissions are now explicitly negotiable and no longer required to be offered through the MLS.
Are California closing costs tax-deductible?
Mortgage interest, discount points, and property taxes are deductible (property taxes subject to the new $40,000 SALT cap). PMI premiums become deductible again in tax year 2026 for AGI under $110,000. Title insurance, escrow fees, recording fees, and transfer taxes are not deductible but add to your home's cost basis, reducing capital gains tax at sale.
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About Jon Teera
Jon Teera is the Lead Developer and Founder of CalcLogix. He builds tools that help homebuyers navigate California's complex closing process—because understanding what you're paying for shouldn't require a real estate attorney.
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