Who Pays for What

One of the most common questions we hear from both buyers and sellers is simple: who actually pays for what? While every contract can negotiate these terms differently, here's what's customary in most California transactions.

Costs Typically Paid by the Seller

• Real estate commission
• Document preparation fee for the deed
• Documentary transfer tax ($1.10 per $1,000 of sales price)
• Any city transfer/conveyance tax (per contract)
• Loan fees required by the buyer's lender (if negotiated)
• Payoff of all existing loans on the property
• Accrued interest to the payoff lender
• Statement, reconveyance, and any prepayment penalty fees
• Termite inspection and repair work (per contract)
• Home warranty (per contract)
• Any judgments or tax liens against the seller
• Property tax proration up to the date of transfer
• Any unpaid HOA dues
• Recording charges to clear prior liens
• Any bonds or assessments (per contract)
• Delinquent property taxes
• Notary and escrow fees
• Title insurance premium

Costs Typically Paid by the Buyer

• Title insurance premium (in some contracts; negotiable by area)
• Escrow and notary fees
• Document preparation fees (if applicable)
• Recording charges for documents in the buyer's name
• Homeowner's transfer fee
• New loan origination charges
• Property tax proration from the date of acquisition
• Interest on the new loan from funding through the first payment cycle
• Inspection fees (general, pest, geological, etc.)
• Home warranty (if not covered by the seller per contract)
• City transfer/conveyance tax (per contract)
• First year's fire/homeowner's insurance premium
• CC&Rs package, even if escrow doesn't close

Personal Property vs. Real Property

One area that occasionally creates confusion: the difference between real property (which transfers with the home) and personal property (which doesn't, unless specified). Real property generally includes anything permanently affixed to the home — light fixtures, drapery rods, mounted mirrors, and landscaping in the ground. Personal property includes items like potted plants, free-standing refrigerators, washers and dryers, microwaves, bookcases, and swag lamps — none of which are automatically included in a sale.

If there's ever any doubt about whether something is included, the safest approach is to spell it out explicitly in your purchase agreement rather than assume.