Closing Costs in San Diego: A Guide for Sellers
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Selling your home in San Diego? One key detail to plan for is closing costs—those fees and expenses that arise when finalizing the sale of your property. In this guide, we’ll explain how closing costs work in San Diego and what specific fees sellers should anticipate.
From loan payoffs to taxes, we’ll cover the most common expenses, helping you stay informed and prepared as you sell your San Diego home. Understanding realty transfer taxes, agent commissions, or other fees can help you budget for a successful sale.
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Disclaimer: This article provides estimates of a seller’s closing costs that are meant for educational and research purposes only; our calculations are not a guarantee.
What are closing costs?
Closing costs are the various fees you’ll need to pay when finalizing the sale of your property. These expenses can include everything from property taxes to insurance premiums, with many of them being standard for homeowners.
However, certain costs, like transfer taxes, can vary depending on where your home is located when it sells.
Mortgage/Loan payoff amount
One important step before selling your home is ensuring that your mortgage is fully paid off. This is known as the loan payoff amount, which includes the remaining balance on your mortgage plus any interest that has accumulated throughout the loan’s term. This amount must be settled to complete the sale, allowing the title to transfer to the new owner free and clear of liens.
The loan payoff amount also accounts for any additional fees that may be tied to your mortgage, ensuring that all outstanding debts are resolved before the sale is finalized.
Property taxes
According to WalletHub, California ranks 16th in the country in terms of property taxes, placing it above cities like North Carolina and New Mexico.
Real estate in California is taxed at a rate of 0.71%, with a median home value of $900,720. To get a better idea of what you might owe, consult a property tax calculator.
Reconveyance fee
After the sale of your home is completed and your mortgage is fully paid off, you will typically be responsible for a reconveyance fee. This fee covers the cost of issuing a reconveyance deed, which formally releases you from your debt obligations. Your mortgage lender will then record the deed, and the fee you owe may vary depending on the regulations of your city, state, or county.
Realty transfer tax
You also might be responsible for what’s known as a realty transfer tax. These are fees assessed by local governments whenever a property changes ownership.
These taxes are sometimes called a “Deed Excise tax” or a “Documentary Stamp tax.” Who ultimately pays these taxes depends on the state, city, or county where the sale occurs.
In San Diego, the total amount levied is split between the buyer and the seller. It’s important to keep this in mind and have a good idea of what you will owe before the sale is finalized. In San Diego, the seller is also responsible for a title fee.
In other parts of California, these fees can fall solely to the seller.
Real estate agent commission
Unless you’re selling your home for sale-by-owner, you’ll likely have used a local agent. Research indicates that an agent’s expertise can significantly impact your sale: In 2023, homes sold with an agent’s assistance had a median price of $405,000, compared to $310,000 for FSBO sellers.
Working with a real estate agent means paying a commission. This fee covers various services, such as accurately pricing your home, marketing it effectively, and negotiating with buyers to ensure you receive the best possible price and terms.
It should be noted, however, that on March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.
HomeLight’s transaction data reveals that the national average real estate agent commission is 5.8% of the property sales price. This commission typically includes fees for both the listing and buyer’s agents, with sellers customarily covering the cost.
Use HomeLight’s commission calculator by entering your city for commission data tailored to your specific area.
Attorney Fees
Some states require an attorney to be present when closing the sale of a property.
Real estate attorneys are not essential for closing in California but may be advised by your real estate agent.
Homeowners Association/Condo Fees
One of the biggest sticking points for sellers is the fees levied by their homeowners’ association (HOA) or condominium association fees.
Like other fees we’ve discussed, these will vary, not just because of the different rules and regulations of your local HOA but also because HOA regulations vary greatly depending on the state. These fees (or dues) are usually prorated at the time of the sale.
The average monthly HOA fee in California is $387.
Seller’s concessions
Sellers may owe money at closing due to financing concessions negotiated with the buyer. These concessions can cover a range of expenses, such as closing costs, repairs, or even home warranties.
One common type of seller concession is repair credits. This option is often utilized when a buyer has a contingency in their offer, frequently tied to the results of a home inspection. If the seller chooses not to make the necessary repairs identified by the inspector, the buyer may have the right to withdraw from the deal without losing their earnest money.
Instead of directly addressing the repairs, the seller can offer cash at closing to cover the cost of the needed fixes. It’s worth noting that these types of concessions are less common in competitive seller’s markets, where contingencies might deter potential buyers.
Miscellaneous closing costs/fees
These are some of the most common closing costs you’ll face as a seller in San Diego. However, keep in mind that many of these costs are negotiable. Your buyer might be open to discussing certain fees, or a real estate agent or attorney can help you secure more favorable terms.
If you’re looking to minimize closing costs and ensure a smooth transaction, HomeLight can connect you with a top local agent. Alternatively, if you’d prefer to skip the hassle of working with an agent and managing closing costs, consider HomeLight’s Simple Sale program. It simplifies the selling process in just three steps: provide some basic details about your home, connect with one of our Home Consultants, and sell your home in as little as 10 days.
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