Closing Costs Explained For Sacramento Buyers and Sellers-If you’re preparing to buy or sell a home in Sacramento, one of the biggest surprises you might face is closing costs. Many first-time buyers and sellers assume that the purchase price is the only major expense, but closing costs can add thousands of dollars to the transaction. Understanding these costs in advance will help you plan ahead and avoid last-minute stress.
Navigating closing costs when buying or selling a home can be overwhelming. From understanding escrow deposits to determining who pays for appraisals, the process often leaves homeowners confused. Closing costs—the fees associated with property transactions—are paid at closing when ownership transfers. As experienced local investors in Sacramento who’ve handled numerous property transactions including challenging tenant situations and distressed properties, we’ve put together this straightforward explanation of common closing costs that both buyers and sellers should understand. Lets dive into Closing Costs Explained For Sacramento Buyers and Sellers. Bonus-Click Here Why Am I Paying All these Fees
Closing Costs Explained For Sacramento Buyers and Sellers-First What the heck Are Closing Costs?
Closing costs are the fees and expenses—outside of the purchase price—that buyers and sellers must pay when a home changes ownership. They include things like loan origination fees, title insurance, escrow charges, transfer taxes, and more.
On average, closing costs range from **2% to 5% of the purchase price**. For example, on a $400,000 home in Sacramento, buyers and sellers together could be paying between $8,000 and $20,000 just in closing costs.
APPLICATION FEE
This fee covers the lender’s cost to process your mortgage application. Some lenders collect this upfront, while many wait until closing. Your lender should clearly communicate the application fee amount before you begin the process.
Before submitting your mortgage application, ask your lender exactly what this fee includes. It typically covers items like credit checks but may also include property appraisals. Understanding these components helps you better anticipate other potential closing expenses and avoid surprises.
APPRAISAL
Most lenders require a professional appraisal when purchasing a home. This assessment determines the property’s fair market value by comparing it to similar properties in the neighborhood. This is especially important for older homes built in the 1950s and 1960s, which are common in many Sacramento neighborhoods.
Typically, the buyer pays the appraisal fee, though this is sometimes negotiable in the purchase contract. For homes with unique challenges like tenant occupancy or excessive clutter, specialized appraisals may be needed.
ATTORNEY FEE
This fee pays for an attorney to review all closing documents, working on behalf of either the buyer or the lender. While attorney review isn’t required in all states, it’s often wise to have a knowledgeable third party examine the paperwork to ensure everything is legal and standard. For properties with tenant occupancy issues, having an attorney familiar with landlord-tenant law can be particularly valuable.
CLOSING FEE
The closing fee is paid to the title company, escrow company, or attorney conducting the closing. This party acts as a neutral third party in the property transfer. Some states require that a real estate attorney be present even when using a title or escrow company.
Your lender or closing agent can provide a detailed explanation of these closing costs and how they apply to your specific situation, whether you’re dealing with a standard transaction or a more complex situation involving tenant issues or property condition concerns.
COURIER FEE
This covers the expense of transporting documents to ensure your loan transaction completes as efficiently as possible, minimizing delays in the closing process.
HOME INSPECTION
Home inspections are often required by lenders, but many sellers also choose to get their own inspections. This cost can be negotiated between buyer and seller. For older homes common in Sacramento neighborhoods, thorough inspections are particularly important to identify any structural issues or needed updates.
ORIGINATION FEE
This fee covers the lender’s administrative costs, typically amounting to about 1 percent of the total loan amount. Some mortgages come without origination fees, so it’s worth shopping around if you’re looking to save on this expense.
Closing Costs Explained For Sacramento Buyers and Sellers
PRIVATE MORTGAGE INSURANCE (PMI)
If your down payment is less than 20% of the purchase price, your lender will likely require you to pay PMI. Many lenders require that you pay the first month’s PMI premium at closing, adding to your initial costs.
RECORDING FEES
When property ownership changes hands, the transaction must be recorded by the local recording office. This official documentation typically comes with a fee that varies by location.
TITLE SEARCH
This fee goes to the title company, which conducts a search of the property’s records to ensure the sale will be legally valid. Like many closing costs, this fee may be negotiable between buyers and sellers. For properties with complicated histories or tenant issues, thorough title searches are especially important.
Closing Costs Explained For Sacramento for Sellers. Consider selling to Us! We pay all sellers costs.
💵 Closing Costs Explained for Sacramento — $350,000 Home
❌ Typical Sale (MLS / Realtor) vs. ✅ Darren Buys Homes Cash
| Closing Cost Category | ❌ Typical Sale (MLS / Realtor) | ✅ Darren Buys Homes Cash |
|---|---|---|
| 🏷️ Real Estate Agent Commissions | 5–6% of sale price (≈ $19,250 on $350,000) | $0 – no agent fees or commissions |
| 🔐 Title & Escrow Fees | Seller pays half of escrow + title insurance (≈ $1,600) | $0 – we pay all title & escrow costs |
| 🧾 Transfer Taxes & Recording Fees | Paid by seller to city/county (≈ $1,200) | $0 – we cover these costs too |
| 🔧 Repairs / Concessions | Often negotiated after inspections (≈ $2,000+) | No repairs required – we buy as-is |
| 💰 Total Estimated Seller Costs | ≈ $24,050 (around 6.9% of sale price) | $0 – we pay all seller costs! |
| 💵 Net Proceeds to Seller | ≈ $325,950 before mortgage payoff | ≈ $350,000* – you keep the full offer |
| ⏱️ Time to Close | 30–60 days (plus repairs & showings) | As fast as 10 days – you pick the closing date |
| 🧠 Peace of Mind | Uncertain buyer financing & hidden fees | Guaranteed cash sale – no surprises at closing |
*Net proceeds may vary based on mortgage payoff, taxes, or agreed offer price. Example shown for a Sacramento home at $350,000.
Detailed Explanation on Closing Costs Explained For Sacramento Buyers and Sellers & Who Typically Pays What?
Typical Buyer Closing Costs
If you’re buying a home, here are the most common costs you can expect to pay:
* **Loan origination fees:** Charged by lenders to process your mortgage.
* **Appraisal and inspection fees:** To confirm the property’s value and condition.
* **Title search and title insurance:** Ensures the home is free of ownership disputes.
* **Escrow fees:** Paid to the escrow company for handling funds and documents.
* **Recording fees and taxes:** Charged by local government agencies to record the transaction.
These expenses can add up quickly, which is why many buyers try to negotiate for sellers to cover part of them.
Typical Seller Closing Costs
Sellers don’t escape closing costs either. Common expenses include:
* **Real estate agent commissions:** Usually the largest cost, typically 5–6% of the sale price.
* **Escrow fees (seller’s share):** Half of the escrow cost is usually paid by the seller.
* **Title insurance (seller’s policy):** Protects the buyer from future ownership disputes.
* **Transfer taxes and recording fees:** Paid to the city or county for transferring ownership.
* **Repairs or concessions:** If negotiated during inspections, sellers may have to pay.
For sellers, these costs can significantly reduce net profits. This is why many homeowners who think *“I’d like to sell my house Sacramento without paying so much in fees”* explore alternative options.
If you need your Sacramento closing costs explained, or you just want experienced help in the home purchase or sales process—especially for properties with tenant issues, excessive clutter, or those needing modernization—contact us today at (916) 300-7962!
Nearby Areas We Buy Houses:
We buy houses in Sacramento, Florin and Elk Grove.
If you’re in Sacramento and need to sell fast, we’re ready to make an offer