When you buy a house or condominium, 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.
Following is a breakdown of fees you should expect to see when you buy or sell a house or condo, and who typically pays them. Fees break down into lender, title and escrow, broker and city and 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); and underwriting fees. Typically, these fees run in the $2,000-$3,000 range, plus optional points.
Title and escrow fees
In Northern California, these two services are managed by the same company, typically a 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 approximately $2,000.
Title fees cover the cost of title research and the issuance of title insurance for the new homeowners (the buyers) 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 two title insurance policies: one for the new owners and one for the new owner’s lender. These are one-time fees that stay in effect for as long as you own your home.
In Santa Clara County, the seller pays for title and escrow and the buyer pays for the 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, document mailing, paying off old loans, and more.
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 and county fees
Some cities charge transfer taxes based on the purchase price. For example, both Mountain View and San Jose charge $3.30 per $1,000 of purchase price. 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 per $1,000 of purchase price, which is usually paid by the seller.
In my next column: What’s the difference between a single-family home and a condo?