Planning Your Buyer Closing Costs
Escrow! We’re cheering for you to get in. This what to expect on the other side.
Below are the standard costs associated with buying a property in Silicon Beach. Some of these fees are split between the buyer and seller, as spelled out in the sales contract. The cost split on these fees is, to an extent, negotiable.
As we negotiate the sales contract on your behalf, we will strive to achieve not only the purchase price you want, but to also limit the number and amount of closing costs for which you are responsible.
Don’t let closing costs in Silicon Beach scare you. Knowledge is power.
Please note: your ability to negotiate costs is usually related to whether you are buying in a seller’s market or a buyer’s market.
I’m here to tell you that in Silicon Beach, the seller versus buyer market debate is a community by community analysis. Any agent who doesn’t understand the distinction locally isn’t paying attention. We talk tons about market trends in our Trendline Report at GetTheTrendline.com.
Buyer Closing Costs
Tax-Related Costs:
Property taxes
Plan on .73% per year with an amount prepaid in escrow. The amount of your prepayment depends on what time of the tax year escrow is closing. Pro tip: Our county assessor’s office here in Los Angeles does not operate on a calendar year, so this calculation might not be as straightforward as it sounds.
The actual amount of your taxes might seem like a lot of money, but don’t forget that under Prop 13, your tax basis is now set for the life of your ownership, except for random bond measures and assessments along the way that might add a modest amount.
Insurance-Related Costs:
title insurance
property insurance
private mortgage insurance (if required by your lender)
flood, wild fire or other specialty insurance (if required by your lender)
Lender-Related Costs:
origination fee
discount points (if applicable)
prepaid interest (if applicable)
processing fee
appraisal review fee
credit report fee
courier fees (if applicable)
underwriting fee
documentation preparation fee
wire transfer fee
Other Costs:
50% of escrow fees (negotiable)
property inspection costs
notary fee
Buyer Broker commission (if required under a Buyer Broker Agreement)
recording fee
termite remediation and other repairs, if not paid by the seller (negotiable)
home warranty (recommended if not paid for by buyer)
moving expenses
A rough rule of thumb for guesstimating your costs to buy a home in Silicon Beach is 6% of the sale price. Please note: in a hyper-competitive bidding war, you may want to offer to pay some portion of the seller’s closing costs and that will necessarily alter your calculation.
Want To Know More?
Want to better understand what each of these fees are? Book time for a strategy call and we’ll explain each that applies to your situation, and which apply and which don’t.
Did you know??? We offer commission discounts for buyers. Book a strategy call and we’ll share the details.
This post is from our “Buyer Edge” series, content designed to give real estate buyers in Silicon Beach an edge in a competitive residential real estate market. Read more about our full Buyer Edge program on our website. Want help buying real estate in Silicon Beach? Contact us or grab time on our calendar. Need help beyond Silicon Beach? Reach out and let us help you find a high-caliber agent with hyperlocal expertise in that area.