Costs of Selling Real Estate Increase in 2017, May Rise in 2018

I have found over the years most sellers and buyers are not familiar with typical costs they will incur when selling or buying a home, they are shocked when they receive their estimated closing statement. It is important for you to know what to expect when you decide to sell your home or when you decide to purchase a home. Ask your Escrow Officer for an estimated closing statement as soon as you decide to list a property or when you start looking for a home to purchase.

Typically, the seller can expect to pay for:

• Real estate commission

• Owners policy of title insurance

• One half of the sub-escrow fee charged by the title company

• One half of the base escrow fee, in addition to fees for handling the payoffs, paying California Withholding tax, and document preparation

• Documentary transfer tax ($1.10 per thousand based on the sales price is paid to the County of Los Angeles, in addition to transfer tax paid to the city the property is located in, as follows (based on the sales price):

▪ Los Angeles: $4.50 per thousand (Pacific

Palisades, Brentwood, Bel Air, Hancock

Park, Venice, Marina del Rey)

▪ Santa Monica: $3.00 per thousand

▪ Malibu, Beverly Hills, Hermosa Beach and

Manhattan Beach: -0-

▪ Redondo Beach: $2.20 per thousand

• City report fees: Los Angeles $72.86

Santa Monica $281.82

• Retrofitting, smoke detectors, gas shut off valve and water heater strapping: approximately $500-$1,000

• Certificate of Compliance: Los Angeles $15

• Natural Hazard Disclosure Report (approximately $100)

• Termite inspection and Section 1 (corrective) work

• Payoffs of loans against the property (principal, accrued interest, statement fee, reconveyance fee)

• Judgments, liens against the seller

• Tax and homeowner association dues (prorated and paid current)

• Homeowner association charges for documents and transfer fees

• Recording fees for grant deed, reconveyance, releases

• Notary fees

• Messenger fees for pick up of contingency items (such as homeowner association documents)

• California Withholding/Franchise Tax Board taxes (if you are not exempt)

• IRS Withholding (if you are a foreign person and are not exempt)

Typically, the Buyer can expect to pay for:

• Lenders title policy

• One half of the sub-escrow fee charged by the title company

• One half of the base escrow fee, document preparation fees, and if the buyer is obtaining a loan, fees for the additional work involved with the new loan and email of the loan documents (you would not believe how much additional work is involved for the escrow holder when a buyer is getting a loan!)

• Recording fees for the trust deed

• Tax & homeowner association dues (prorated)

• New loan fees (pre-paid interest, appraisal, document preparation, funding fee, underwriting, tax service, credit report, processing, points/origination fees)

• Inspection fees

• First year fire insurance premium

• Notary fees

• Messenger fees: delivery of contingency items and sending loan documents to the lender

Thank you,

Sharon Sharp, President

Escrow L.A., Inc.