Are you trying to pin down how much cash you will actually need to close on a San Diego home or what you will net when you sell? Closing costs can feel like a moving target, especially when different parties cover different fees. In this guide, you will learn what closing costs include, who usually pays what in San Diego, how loan type changes the math, and how to estimate your numbers with simple worksheets and real examples. Let’s dive in.
What closing costs include
Closing costs are the one-time fees and prorations due when your transaction closes. They are separate from a buyer’s down payment or a seller’s mortgage payoff. They include third-party fees, lender charges, prepaid items, prorations, and any credits agreed to in the contract.
Buyer line items
- Third-party fees: escrow and title, recording, appraisal, inspections, termite report, HOA transfer/resale fees if applicable.
- Lender fees: origination and underwriting, discount points if chosen, credit report, and prepaid interest.
- Prepaids and reserves: initial deposits for property taxes and insurance collected by escrow, plus prorations.
- Concessions: any seller credits that offset your costs (subject to loan program limits).
Typical buyer closing costs in San Diego often fall around 2 to 5 percent of the purchase price, not including the down payment. Actual amounts vary by loan type, price point, timing, and whether you receive seller credits.
Seller line items
- Real estate commissions: usually the largest expense and commonly about 5 to 6 percent of the sale price.
- Title, escrow, transfer and recording charges, and HOA fees if applicable.
- Disclosure-related reports and required state or local forms.
- Prorations: property taxes, HOA dues, and utilities through the closing date.
- Any agreed seller credits to the buyer.
With commissions included, total selling costs commonly land around 6 to 10 percent of the sale price before paying off any mortgages or liens.
Who usually pays what in San Diego
Customs can change by neighborhood and negotiation, but here are common Southern California practices you will see in San Diego.
Escrow and title
- Escrow fee: often split between buyer and seller, though it is negotiable.
- Title insurance: sellers commonly pay for the owner’s title policy. The buyer or buyer’s lender usually pays for the lender’s policy. Confirm with your escrow officer for your specific deal.
Transfer tax and recording
- Documentary transfer tax: typically paid at closing when the deed transfers. Rates are set by the county and sometimes by the city. Verify current San Diego County and City rates with the County Recorder or City Treasurer.
- Recording fees: paid to record the deed and buyer’s loan. Buyers usually pay to record their mortgage; the grant deed recording is based on local custom and negotiation.
Inspections, disclosures, and repairs
- Buyers commonly pay for their own inspections such as general home, appraisal, roof, sewer, or other specialty checks.
- Sellers must provide required disclosures, including Natural Hazard Disclosure reports. Termite inspections are common; sellers often negotiate repairs or fumigation if needed.
HOA fees and documents
If the home is in an HOA, there are usually resale packets and transfer fees. In many San Diego transactions, sellers cover HOA clearance and transfer fees, but check your purchase agreement and HOA schedule.
Taxes and assessments
Property taxes are prorated to the closing date. Some newer San Diego communities carry Mello-Roos or special assessments that affect your annual taxes. Escrow will collect the correct prorations and, for buyers using a loan, initial reserves for taxes and insurance.
How loan type changes your costs
Your loan program directly affects what you pay and what a seller can cover.
Conventional loans
Conventional buyer closing costs often fall in the 2 to 5 percent range. Seller concessions are allowed but limited based on the down payment and program rules. Your lender will confirm current limits and eligible uses.
FHA loans
FHA buyers pay an upfront mortgage insurance premium (UFMIP), which can be financed into the loan, plus an annual MIP. FHA permits seller concessions to help with allowable closing costs. Ask your lender for current FHA limits and how credits can be applied.
VA loans
VA loans include a funding fee that varies by service history and down payment. VA allows certain seller-paid costs and concessions and restricts some nonallowable fees. Your loan officer will outline which fees can be covered by the seller and how credits must be structured.
Points and rate buydowns
You can choose to pay discount points at closing to lower your rate. In many cases, seller credits can cover points and prepaids, subject to your loan program limits and caps. Confirm with your lender before writing or accepting an offer.
How much to budget in San Diego
- Buyers: plan for about 2 to 5 percent of the purchase price in closing costs, in addition to the down payment. Your final amount depends on loan type, lender fees, timing, and credits.
- Sellers: expect commissions around 5 to 6 percent plus another 1 to 3 percent for other closing charges, for a typical total of 6 to 10 percent before mortgage payoff.
These are workable rules of thumb to start your budgeting, then refine with quotes from your lender, title, and escrow.
Quick worksheets to estimate
Use these simple worksheets to get in the ballpark before you receive your official Loan Estimate and Closing Disclosure.
Buyer cash-to-close formula
Estimated cash to close =
- Down payment (price × down payment percent) plus
- Buyer closing costs (price × assumed percent) plus
- Prepaids and reserves (initial escrow for taxes and insurance plus prepaid interest) plus
- Upfront mortgage insurance or funding fee, if applicable minus
- Seller credits toward closing costs
Seller net proceeds formula
Estimated net to seller =
- Sale price minus
- Real estate commissions minus
- Seller closing costs (title, escrow, transfer, recording, HOA, reports) minus
- Mortgage payoff(s), liens, judgments minus
- Any seller credits to buyer minus
- Prorations through closing
Example scenarios
The examples below are rounded and illustrative. Actual fees vary by provider, price tier, and timing.
Scenario A: $600,000 purchase
Buyer (conventional, 20 percent down):
- Down payment: $120,000
- Buyer closing costs (assume 3 percent): $18,000
- Prepaids and reserves: $3,000
- Estimated cash to close before credits: about $141,000
- If the seller credits 2 percent ($12,000), buyer cash to close is about $129,000
Seller:
- Commission (5.5 percent): $33,000
- Other seller costs (assume 1.0 percent): $6,000
- Estimated net before mortgage payoff: about $561,000
Scenario B: $1,200,000 purchase
Buyer (conventional, 10 percent down):
- Down payment: $120,000
- Buyer closing costs (assume 3.5 percent): $42,000
- Prepaids and reserves: $6,000
- Estimated cash to close before credits: about $168,000
Seller:
- Commission (5.5 percent): $66,000
- Other seller costs (assume 0.9 percent): $10,800
- Estimated net before mortgage payoff: about $1,123,200
Scenario C: $2,000,000 purchase
Buyer (conventional, 25 percent down):
- Down payment: $500,000
- Buyer closing costs (assume 2.5 percent): $50,000
- Prepaids and reserves: $10,000
- Estimated cash to close: about $560,000
Seller:
- Commission (5.5 percent): $110,000
- Other seller costs (assume 0.6 percent): $12,000
- Estimated net before mortgage payoff: about $1,878,000
Ways to reduce your cash to close
- Request seller credits: Work with your agent to structure credits that fit your loan’s limits. Credits can often cover lender fees, prepaids, and discount points.
- Compare lenders: Origination and underwriting fees vary. Rate choices and points change your upfront versus monthly cost.
- Time your closing: The date on the calendar affects prepaid interest and tax reserves. Your lender and escrow officer can show you the impact of different dates.
- Align repairs and credits: If inspections reveal issues, negotiating repairs or a closing credit can shift out-of-pocket costs within program rules.
Avoid surprises at closing
- Ask for early estimates: Get a detailed fee quote from your lender and from your title and escrow teams as soon as you are in contract.
- Review required disclosures: Lenders must provide a Loan Estimate within 3 business days of application and a Closing Disclosure at least 3 business days before closing. Use these to confirm your final cash to close.
- Verify transfer tax and recording: Confirm current San Diego County and any City of San Diego charges with your escrow officer.
- Plan for HOA and special taxes: HOA resale packets and Mello-Roos assessments are common in San Diego and can affect prorations and reserves.
Investors and luxury sellers: special notes
- Mello-Roos and special districts: Newer communities often have special taxes that affect cap rates or carrying costs. Build them into your underwriting and be ready for prorations at closing.
- Percentage shift at high prices: Flat and tiered fees can change the percentage of closing costs at luxury price points. Review your title premium and escrow schedule for the exact impact.
- Rate strategy: For financed purchases, discount points and temporary buydowns can be covered with seller credits when allowed. Confirm program caps with your lender before offer negotiations.
What to verify locally
- San Diego County Recorder and Treasurer-Tax Collector for documentary transfer tax, recording fees, and property tax information.
- City of San Diego for any city transfer tax or related charges if the property is inside city limits.
- Local title and escrow companies for current title insurance premiums and escrow fee schedules.
- Your lender for program rules on FHA, VA, and conventional concession limits, plus any upfront insurance or funding fees.
Ready to run the numbers on your specific property and loan type? Schedule a private consult with Christopher Burgos to get a tailored closing cost breakdown and negotiation plan.
FAQs
Who pays escrow and title fees in San Diego?
- It is common to split escrow fees, while sellers often pay for the owner’s title policy and buyers or their lenders pay for the lender’s policy, but all items are negotiable and should be confirmed with escrow.
How much should a San Diego buyer budget for closing costs?
- Buyers typically plan for about 2 to 5 percent of the purchase price in closing costs, in addition to the down payment, with the final amount shaped by loan type, fees, and any seller credits.
What are typical total selling costs for a San Diego seller?
- Many sellers see total costs around 6 to 10 percent of the sale price, including commissions of about 5 to 6 percent plus additional closing charges before mortgage payoff.
Can a San Diego seller pay a buyer’s closing costs?
- Yes, seller credits are common and can cover eligible closing costs and prepaids, but the size and use of credits are limited by the buyer’s loan program and lender rules.
Which closing fees are non-negotiable in San Diego?
- Government fees like recording and documentary transfer tax, plus prorated property taxes and special assessments, are not negotiable, although who pays certain items can be negotiated.
When will I see my final cash to close?
- Your lender must provide a Loan Estimate within 3 business days of application and a Closing Disclosure at least 3 business days before closing; use the Closing Disclosure to confirm your final number.
