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Closing Costs
2-5% of purchase price and include some of these below. See next section for a detailed breakdown. 2-3% is average.
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Appraisal
This is only applicable if you are not paying cash. Typically a couple hundred dollars, is ordered by the mortgage lender and rolls into the closing costs. They want to make sure the home is worth what you are paying & what they are funding. If it isn’t you often can negotiate the price down with the seller.
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Earnest Money Deposit
Upon offer acceptance, a good faith deposit of 1%-5% of the purchase price is made and held in escrow. This deposit goes toward closing costs, with any excess returned to you. A larger deposit shows the seller you're serious; typically, 1.5%-3% is considered strong.
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Inspections
Costs vary from a few hundred to over $1K. As an ex. a 3K sf 5bed/4bath home is $1.2K. The inspections can include roof, sewer, termites, general inspection. Once they are done a RFR (request for repair) can be submitted to the seller. Either they will provide seller credits or repair for you. They can also deny completely.
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Insurance
Typically you need title, condo insurance and additional earthquake insurance. Prices vary based on how much coverage you want. The prepayment of the first year is rolled into the closing costs.
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Property Tax
Typically 1.25% of the assessed value. Paid annually or can be rolled into the monthly mortgage payment. Prepayment of property taxes for the period from the closing date to the end of the tax year is a part of the closing costs.
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Downpayment
Typically 3%-20% of the home's purchase price paid to the lender. Only applicable if you are not paying the full price in cash and instead taking out a mortgage.
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HOA Fees
For condos and townhouses. Paid monthly to HOA. Covers common space maintenance and usually earthquake insurance for the building.
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Realtor Fees
The typical buyer agent fee is between 2.5-3%. Buyers almost always want to add this to the offer and in most cases are successful in getting the seller to provide enough concessions to cover it.
