Ever wonder exactly where your money goes on closing day in Culver City? You are not alone. Buyers and sellers often hear about “closing costs” without a clear breakdown of who pays what and why. In this guide, you will see each line item explained in plain English, how local practices typically work in Los Angeles County, and how to estimate your cash to close or net proceeds. Let’s dive in.
Closing costs, defined
Closing costs are the fees, taxes, and prepaid items due when a home changes hands. They include escrow and title charges, recording and transfer taxes, lender fees, inspections, prorations for property taxes and HOA dues, and any agreed credits. In California, many items are customary but negotiable, and your purchase agreement controls. Escrow coordinates all funds and paperwork and issues the final settlement statements.
Who pays what in LA County
While every contract is negotiable, these are common practices in California and Los Angeles County:
- Brokerage commissions: Typically paid by the seller and shared between listing and buyer brokerages.
- Escrow fees: Commonly split 50/50 between buyer and seller.
- Title insurance: Seller often pays for the owner’s policy; buyer pays for the lender’s policy.
- Recording fees: Buyer usually pays to record their new loan; other recordings are negotiable.
- Transfer taxes: Frequently paid by the seller; verify local practice and rates for county and city taxes.
- Property tax prorations: Split between buyer and seller based on the closing date.
- HOA items: Seller often pays for HOA transfer/estoppel docs; regular dues are prorated.
- Inspections and appraisal: Buyer usually pays inspections and appraisal; repairs or repair credits are negotiated.
- Lender fees and points: Paid by the buyer unless a seller credit covers them.
- Payoff and reconveyance: Seller pays off any existing mortgages and related reconveyance costs.
Line-by-line costs you will see
Brokerage commission
Commission compensates the listing and buyer brokerages. It is customarily paid by the seller. A typical range is about 5% to 6% of the sale price, though actual terms vary by agreement.
Escrow fees
Escrow handles funds, documents, and recording. In many LA County deals, buyer and seller split escrow fees, but it is negotiable. Fees scale with price and provider and can run from several hundred to a few thousand dollars per side.
Title insurance
There are two policies. The owner’s policy protects the buyer’s ownership and, in many California markets, is customarily paid by the seller. The lender’s policy protects the mortgage lender and is customarily paid by the buyer. Premiums vary with the purchase price and are set by regulated rate tables.
Recording fees
These are county charges to record documents such as the deed and the buyer’s new mortgage. Buyers usually pay to record their loan; other recording charges may be negotiated. Fees are set by the county per document and are generally modest compared to other items.
Transfer taxes
Documentary transfer tax may be charged by Los Angeles County and by an incorporated city. The purchase agreement determines who pays, and many sellers pay this tax. Always confirm whether Culver City has a municipal transfer tax and verify current rates with the county and city before you finalize a net sheet.
Property tax prorations
Property taxes are split based on the days each party owns the home during the tax year. If taxes are unpaid for a period the seller occupied, the buyer receives a credit at closing. LA County follows the California base rate framework of 1% plus local assessments and parcel taxes; the exact installment timing affects prorations.
HOA fees and documents
If the property is in an HOA, expect transfer or estoppel fees for the HOA’s payoff and document processing. Sellers typically order and pay for the HOA document package and transfer processing. Regular monthly dues are prorated between buyer and seller.
Inspections, appraisal, and repairs
Buyers usually pay for home inspections, pest inspections, specialty reports, and the lender’s appraisal. If issues arise, you and the seller can negotiate repairs or a credit in lieu of repairs. Inspection costs are often a few hundred dollars each, and appraisals can range from a few hundred dollars to over a thousand depending on property and loan.
Lender fees and loan-related charges
Loan costs can include origination, underwriting, processing, credit report, flood certification, appraisal, discount points, and prepaid items for taxes and insurance. Buyer closing costs typically run about 2% to 5% of the purchase price when you include prepaid items, but your Loan Estimate will provide exact figures for your loan program.
Reconveyance and payoff fees
If the seller has a mortgage, escrow will obtain a payoff demand and pay the loan from sale proceeds. The payoff includes the principal balance plus interest through the payoff date and any reconveyance or payoff statement fees. These items reduce the seller’s net.
Miscellaneous charges
Couriers, wires, notaries, HOA transfer fees, and optional items like a home warranty can add several hundred dollars to either side. The contract determines who pays, and some sellers offer a one-year home warranty as a concession.
Culver City specifics to verify
Culver City sits within Los Angeles County, so part of your prep is confirming local schedules and rates. Before you finalize numbers, verify:
- Documentary transfer tax rates at both the county and the city level, and which party pays per your contract.
- LA County recording fee schedule for current per-document charges.
- LA County property tax installment schedule, current assessed value, and any parcel taxes that affect prorations.
- Title insurance premiums using regulated rate tables for the purchase price band.
- Escrow fee schedules with local escrow companies active on the Westside.
- HOA transfer and estoppel fees with the specific HOA or management company.
How credits and concessions work
Seller credits are a powerful tool to balance closing costs. A seller can contribute toward a buyer’s allowable closing costs, subject to limits set by the loan program. The credit appears on the Closing Disclosure, reduces the buyer’s out-of-pocket cash, and reduces the seller’s net proceeds by the same amount. You can also negotiate a credit instead of repairs, which achieves a similar result without scheduling contractors before closing. Always confirm contribution limits with your lender, since programs like FHA, VA, and conventional loans have different caps.
Build a clear net sheet
A net sheet helps you see the whole picture in one place. You can create one for a seller’s net proceeds and one for a buyer’s cash to close.
Seller net sheet steps
- Start with the sale price.
- Subtract agreed seller concessions or credits to the buyer.
- Subtract seller-paid closing costs: commission, owner’s title policy (if customary in your deal), seller’s share of escrow, transfer taxes, and recording or HOA transfer fees if applicable.
- Subtract mortgage payoffs and any liens or judgments.
- Adjust for prorations: unpaid property taxes or HOA dues for your ownership period.
- The result is your estimated net proceeds at closing.
Buyer cash-to-close steps
- Start with the purchase price and your down payment to calculate your loan amount.
- Add buyer-paid closing costs: lender fees and points, appraisal, inspections, lender’s title policy, buyer’s escrow share, and recording charges.
- Add prepaid items: property taxes, homeowner’s insurance, and prepaid interest your lender collects.
- Subtract any seller credits negotiated in the contract.
- The result is your estimated cash to close.
Example scenario (for illustration)
Below is a simple illustration to show structure. Actual fees and taxes vary by provider, program, and current county or city rates.
- Sale price: 1,000,000
- Seller side highlights:
- Commission at 5%: 50,000
- Owner’s title policy: 2,500
- Seller share of escrow: 1,250
- Documentary transfer tax: 1,100
- Mortgage payoff: 400,000
- Repair credit to buyer: 3,000
- Property tax proration: 2,750
- Estimated seller net: about 544,900
- Buyer side highlights:
- Down payment at 20%: 200,000
- Loan amount: 800,000
- Lender fees and points: 6,000
- Appraisal and inspections: 1,200
- Buyer share of escrow: 1,250
- Lender’s title policy: 1,600
- Recording for loan: 150
- Prepaids (tax and insurance): 3,000
- Seller credit: 3,000
- Estimated cash to close: about 210,200
Use your lender’s Loan Estimate and your escrow/title quotes to replace these placeholders with real numbers for your property and loan.
First-time and move-up tips
- First-time buyers: Plan for both down payment and closing costs. Buyer closing costs plus prepaids often total several percent of the purchase price. Ask your lender about programs that may help with down payment or closing expenses and confirm any limits on seller credits.
- Move-up buyers: If you are buying before selling, factor the cost to carry two properties for a short period, including mortgage, taxes, insurance, utilities, and HOA dues. Consider timing, bridge options, and whether a sale contingency makes sense in your situation.
Quick checklist before you close
- Confirm transfer tax rates and who pays per your contract.
- Ask escrow for a current fee quote and a preliminary settlement statement.
- Get title insurance premium quotes from a title company for both owner and lender policies.
- Review your Loan Estimate early and update numbers once your loan is locked.
- Order the preliminary title report to surface any liens or special assessments.
- Request mortgage payoff statements early to include per-diem interest.
- Verify HOA estoppel and transfer fees, and order the HOA docs promptly.
- Check for any local parcel taxes or assessments that affect prorations in Culver City.
Let’s make your numbers clear
If you want a precise net sheet for your Culver City sale or a cash-to-close plan for your purchase, you deserve guidance that is both local and technical. That is our lane. Reach out to Vida Ash for a customized breakdown and to request a Free Home Valuation & Marketing Plan. We will walk you through each line so you can make confident decisions.
FAQs
Who pays transfer tax in Culver City?
- It depends on your contract, and many sellers pay the documentary transfer tax; confirm current county and any city tax and who pays before you finalize your net sheet.
How much will closing costs be for a Culver City buyer?
- Buyer closing costs, including prepaid taxes and insurance, commonly run about 2% to 5% of the purchase price; your Loan Estimate will show your exact figures.
How much will a Culver City seller pay to close?
- Many sellers pay commission (often around 5% to 6%) plus transfer taxes, the owner’s title policy if customary, a share of escrow, recording, and any payoffs and prorations; use a net sheet to estimate your proceeds.
Can the seller pay my closing costs in Culver City?
- Yes, sellers can give credits toward allowable buyer closing costs, but loan program limits apply and the credit must be written into the contract and shown on the Closing Disclosure.
When will I see exact numbers before closing?
- Buyers receive a Loan Estimate within three business days of loan application and a Final Closing Disclosure at least three business days before closing; sellers receive a preliminary settlement statement from escrow.
