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What are closing costs when buying a home?

Home closing costs in Los Angeles

Closing fees my clients rarely think about when writing offers or listing their homes for sale. In other words, the fees associated with buying or selling a house should be considered as a precursor to writing offers or listing your home for sale either as a For Sale By Owner or on the MLS with a Realtor.

This list will give you a snapshot of what items are typically included in closing costs (not the specific amounts as fees vary). Of course, the buyer and seller may negotiate “who pays what,” but once the purchase contract is fully executed, instructions cannot be changed without a fully executed escrow amendment.

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Real Estate Commissions:

If the property is listed and sold by real estate agents or brokers there will be commissions (s) to calculate.


The seller is required to pay the property taxes through the final day of ownership.

Homeowners Insurance:

The buyer is required to purchase a fire and hazard insurance policy. More times than not, the lender will require the first year’s insurance premium to be paid at the close of escrow.

Assessments and Liens:

Assessments and liens against individuals and/or the physical property must be paid off before the close of escrow. The title company will most likely flag much of this information in the preliminary title report. The title company is basically an insurance policy for the buyer. The escrow officer will work with the appropriate parties to clear up any problems or monies owed to third parties so that the escrow may close on time.

Escrow Fees and Title Insurance:

The seller or the buyer or both may absorb the costs associated with closing an escrow including the title insurance fee. This fee is referred to as the owners (or homeowner’s) policy. The owner’s policy covers the new owner’s interest and title to the new property. The buyer typically pays for the “lender policy” that will cover the new lender’s interest in the title to the property. “Who pays the escrow fee” is negotiable in Los Angeles, but it’s generally split between the buyer and the seller except on certain types of government loan programs.

Other fees associated with buying and selling a home in Los Angeles:

  • Documentation preparation fee
  • Loan fees
  • Notary fees
  • Deed recording charges
  • Natural Hazard disclosure report
  • Special courier or delivery fees
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