Guide To How California Real Estate Fees Are Typically Divided

October 10, 2008 by  
Filed under Destinations

Comments Off on Guide To How California Real Estate Fees Are Typically Divided

Southern California Real Estate

All real estate transactions involve numerous fees that can be confusing to both buyers and sellers. It’s very important that both parties understand which fees they are expected to pay. California real estate transactions involve payments that are divided differently between the buyer and seller depending on which the area the Californian property is located. The list of fees may be quite lengthy and often include escrow, title, insurance, deed, notary, recording, attorney, real estate, taxes, and inspections. Oddly, the property location is typically used to determine which fees the buyer will pay, which the seller will pay, and which will be divided between the two parties. Below are the usual real estate transaction fees in California and which party typically pays for it. Important to note is that the payments are negotiable between the buyer and seller as part of the real estate transaction.

Escrow is a third party agent that receives, holds, and disburses the funds and documents for the real estate transaction. This fee is usually paid by the buyer in northern California and by the seller in southern California. It is common for the buyer and seller to split these fees.

The title search is the process where public records are reviewed to research any previous liens or problems on the property. This fee is customarily paid by the buyer in northern California and the seller in southern California. This is most beneficial to the buyer, so it is reasonable to request the buyer to take care of this fee.

Title insurance protects the lender, the seller, and the borrower against any defects or previous claims to the property being transferred or sold. In northern California, the buyer usually pays for this while in southern California, the seller does. Title insurance benefits the buyer, so requesting that he or she pay for it is reasonable.

Notary fees and recording fees are paid by the buyer for trust and grant deeds which help the buyer to purchase and finance the property. Notary fees and recording fees are paid by the seller; when it is a reconveyance deed on the property which the seller will receive when paying off an existing mortgage.

In California, the documentary transfer and city transfer taxes are usually paid by the seller. If there is attorney involved in the transaction, the fees are paid by the party that hired the attorney. All inspection reports include the following: home inspection, roof, pest control, general contractor and any others. These should all be paid by the buyer, as this party usually selects the company to perform said inspections. If a home warranty offered, it is paid by the seller. The buyer, however, may purchase one if desired. As a reminder, it is acceptable for the buyer and seller to reach any agreement that they feel is equitable for the payment of these fees.