Escrow and closing costs in California
Plain-language look at what escrow does, who pays what, and the typical 2 to 3 percent of purchase price that closing costs run in California.
What escrow does
Escrow is a neutral third party that holds funds and documents until both sides have met their obligations. In California, escrow companies handle the bulk of the closing process.
Common closing costs
Buyer costs include escrow fees, title insurance, lender fees, the appraisal fee, recording fees, and prepaid taxes and insurance. Seller costs include the commission and most transfer taxes.
Who pays for what
Costs are negotiable in California but follow customary splits, which vary slightly by county. MUVE walks buyers and sellers through the typical breakdown before any offer is written.
Prepaid items
Property taxes and homeowner insurance are often prepaid at closing, sometimes for several months in advance. These are not technically closing costs but they show up on the closing statement and need to be funded.
The closing statement
The final settlement statement, sometimes called the closing disclosure, itemizes every penny. MUVE reviews it line by line with clients before any signing happens.
Want an estimate for your specific transaction? MUVE can pull a draft of expected costs based on your target price range.
Talk through your transaction →More from MUVE's buyer guides.
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Read →The home-buying timeline, step by step
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