“Closing” is the term used for the completion of a real estate transaction. At closing, both the buyer and the seller settle the fees associated with the transaction, the mortgage note is issued, and certain fees are paid by each party. These fees are called closing costs.
When buying or selling a house, closing costs are necessary to settle the transaction between all the parties involved. These parties include the seller, the buyer, a title company, the buyer and/or seller’s attorney, and the real estate agent/s.
Read on to learn more about the closing costs in Orange County, California.
Normal Closing Costs for Seller and Buyer in Orange County, CA
Buyer Closing Costs in Orange County, CA
Buyer closing costs in Orange County, California average between 2% and 5% of the home purchase price. Given these percentages, a typical buyer can end up paying somewhere between $15,500 and $38,750 in Orange County closing costs. This is based on the median home price in California, at $775,000 as of spring 2022.
Below are the typical closing costs for buyers in Orange County, CA.
Mortgage Application Fee
This is a fee that lenders charge for processing the borrower’s loan application. This is usually charged at the start of the loan process.
Closing fees are charged for management of the funds and documents associated with the “closing of escrow” transaction. These are also called the escrow fees or settlement fees.
This is the fee for the appraisal of the property. Mortgage lenders require home buyers to get the property appraised to determine its loan to value ratio (LTV) and how much loan the buyer can get.
The home buyer may choose to pay an attorney to assist with the closing.
This is payment for documents that were sent or mailed using a courier or mail-type service. If the closing is done digitally, this fee will not be applicable.
Photo by Mikhail Nilov
Seller Closing Costs in Orange County, CA
The average closing costs for a seller in California amount to roughly 5.35% of the home’s final selling price. Given the median home price of $775,000, this would be around $41,462.50.
Below are the typical closing costs for seller California, Orange County.
California Real Estate Commission
The seller’s responsible for both the commission of their agent and the buyer’s agent. The average total commission most home sellers pay in California is 5% to 6% of the final selling price. This is sometimes less for higher-priced homes.
Escrow Fees in California
Paid to the escrow company – a neutral third party between the seller and the buyer that holds the money until the home sale is final. They are responsible for ensuring that the buyer doesn’t receive the property and the seller doesn’t receive payment until everything is executed as agreed upon in the contract.
Title insurance provides protection to the buyer against financial loss due to defects on the title. It also protects against liens that might emerge during or after the real estate transaction closes.
California Transfer Taxes
The seller is also responsible for city and county transfer taxes. These are also referred to as “documentary transfer taxes”. The cost of the county transfer tax in California is $1.10 for every $1,000 of the sale price, except for San Francisco County.
Some of the miscellaneous fees include:
- Recording fee
- Notary fee
- HOA fee (if the property has an HOA)
- Any reports and/or inspections that are not paid upfront (i.e., home inspection fees)
Average Closing Costs and Realtor Fees in Orange County, CA
For buyers, average closing costs in Orange County, CA range from 2% to 5% of the home purchase price. For sellers, the average closing costs amount to roughly 5.35% of the home’s final selling price.
Realtors in Orange County, CA typically charge a standard percentage of 5% to 6%. But for high-priced properties, such as those that sell for over a million dollars, the commission may be more like 4% to 5%. The amount is negotiated between the seller and listing agent before a contract is signed.
Closing Costs Orange County, California: Cash Purchase Real Estate
Home buyers in Orange County (and other cities and counties in California) for the most part spend from 1% up to 3% of the contract price of the home in closing fees. What this means is that a high-priced home in Laguna Beach for $2 million could end up with higher closing costs starting near $20,000 and the same is true for lower priced homes.
A cash buyer is someone who uses their own funds to cover the full purchase price of the property. This means that the buyer is not taking out a loan. The funds could come from their savings, investments, or the sale of another property.
When paying cash for a home purchase, the buyer no longer needs to pay interest on loan and any closing costs. There are no mortgage origination fees, appraisal fees, or other fees charged by lenders to assess buyers. Essentially, closing costs of Orange County cash real estate are lower than when a buyer is financing through a loan.
Average Refinance Closing Costs: Orange County, CA
According to Bankrate, refinancing a mortgage provides some benefits to the buyer, such as:
- Lowers the interest rate
- Shorten the loan term
- Converts equity into funds they need
However, this comes with a price tag. Just like the first mortgage, the buyer needs to consider the closing costs, which vary, depending on the size of the loan and the state and county where you live.
In general, the buyer can expect to pay 2% to 5% of the loan principal in closing costs. For a $200,000 mortgage refinance, for example, closing costs could range from $4,000 to $10,000.
Here are a few ways a buyer can lower the cost to refinance:
- Improve your credit score
- Compare mortgage offers and rates
- Negotiate closing costs
- Ask for fee waivers
- Consider buying mortgage points
- Go with your original title insurer
- Opt for a no-closing cost refinance
Typical Closing Costs for Seller: Orange County, CA
The list below enumerates the typical closing costs for seller Orange County, California:
- California Real Estate Commission
- Escrow Fees in California
- Title Insurance
- California Transfer Taxes
- Miscellaneous Fees
Typical Townhome Closing Costs in Orange County, California
Townhomes generally cost less than single-family homes and, since closing costs are usually a percentage of the home value, a buyer of a townhouse can expect to pay less in closing costs.
Here are upfront and ongoing costs a buyer of a townhouse will have to prepare for:
- Upfront costs
- Down payment
- Closing costs
- Ongoing costs
- Property taxes
- Homeowners insurance
- HOA fees, if applicable
- Some or all utility bills
- Interior and exterior maintenance
- Monthly mortgage payment
I hope you found this article helpful, but I know that closing costs can be overwhelming, especially for first-time buyers. If you’re considering buying a house in the Orange County area, it’s best to have a reliable realtor by your side and I’ll be happy to help!
Feel free to give me a call today at (949) 235-8614 and let’s start planning for your new home.
Frequently Asked Questions
Can a buyer pay seller closing costs in Orange County, California?
Yes. In Orange County, some closing costs are traditionally paid by the seller, while some are traditionally paid by the buyer. But these are not “rules” and all closing costs are negotiable.
What are the typical closing costs in Orange County, CA?
The typical buyer closing costs in Orange County, CA are mortgage application fee, closing fees, appraisal fee, attorney fees, and courier fee. For sellers, typical closing costs are California real estate commission, escrow fees in California, title insurance, California transfer taxes, and miscellaneous fees.
How can home buyers reduce their closing costs?
Home buyers can negotiate the closing costs with the seller. Depending on their agreement, the seller may agree to shoulder some or all of the buyer’s closing costs.
Are there any services you offer to help home buyers reduce their closing costs?
Definitely! Call me today at (949) 235-8614 so I can give you more information.
Are any other fees associated with buying a home in Orange County, CA?
Fees and charges associated with a home purchase in the OC are called closing costs.
What is the best way for home buyers to budget their closing costs?
Closely working with your realtor and lender will help you budget your closing costs and get the best deal from your real estate transaction.
Can you explain the closing costs in Orange County, CA?
For buyers in Orange County, CA, closing costs range from 2% to 5% of the home purchase price on average. For sellers, the average closing costs amount to roughly 5.35% of the home’s final selling price.
What are the most common fees associated with closing costs?
The common fees for buyers include the mortgage application fee, closing fees, appraisal fee, attorney fees, and courier fee. For sellers, the common fees and charges are California real estate commission, escrow fees in California, title insurance, California transfer taxes, and miscellaneous fees.