What Are Closing Costs? A Guide for Home Sellers in the East Bay

If you're thinking about selling your home in the East Bay, one of the first questions you'll have is: What am I actually walking away with? The answer depends heavily on your closing costs. Most sellers are surprised by how much comes off the top at close of escrow. This guide breaks it all down so you know exactly what to expect before you ever accept an offer.

What Are Closing Costs?

Closing costs are the fees and expenses that get paid at the end of a real estate transaction, right when the property officially transfers from seller to buyer. They come out of your sale proceeds, meaning you typically don't write a check out of pocket. Escrow handles everything and cuts you a net check after all costs are deducted.

Think of it this way: your sale price is not your take-home amount. Your net proceeds are what's left after paying off your mortgage, agent commissions, taxes, and all the fees listed below.

What Does the Seller Pay?

Here is a breakdown of the typical costs a seller in California is responsible for:

1. Real Estate Agent Commissions This is usually the largest line item. Commission rates vary and are always negotiable, but plan for a combined buyer's and listing agent commission as part of your net sheet calculation. Your agent should provide you a seller's estimated net sheet before you go on market.

2. County Transfer Tax California charges a documentary transfer tax statewide at a rate of $1.10 per $1,000 of the sale price. This is paid by the seller at close of escrow. On a $1,000,000 sale, that's $1,100.

3. City Transfer Tax Some cities layer on their own transfer tax on top of the county rate. Daly City, for example, does not charge a separate city transfer tax, so sellers there only pay the San Mateo County rate of $1.10 per $1,000. Other cities in the Bay Area are not as straightforward. San Francisco has a tiered transfer tax that ranges from $7.50 to $25 per $1,000 depending on the sale price. Oakland, Alameda, and Berkeley also have their own city rates. If you are selling in any of these cities, your agent should walk you through the specific transfer tax schedule before you price your home.

4. Title Insurance (Owner's Policy) The seller typically pays for the owner's title insurance policy in Northern California. This protects the buyer against any title defects or claims that may arise after closing. Cost is based on the sale price and is set by a rate schedule.

5. Escrow Fees Escrow is the neutral third party that holds funds, coordinates paperwork, and ensures both sides meet their obligations. The escrow fee is usually split between buyer and seller, though in some counties the buyer pays. San Mateo County custom is for the buyer to pay escrow and title fees, but this is always subject to negotiation in the offer.

6. Natural Hazard Disclosure Report (NHD) Required by law in California. Sellers pay for this report, which discloses whether the property is in a flood zone, fire hazard area, earthquake fault zone, and other state-designated hazard areas. Cost is typically $100 to $150.

7. Home Warranty (If Offered) Some sellers offer a home warranty as an incentive to buyers. This is optional but common in competitive markets. Cost is usually around $400 to $600.

8. Any Agreed Seller Concessions If a buyer negotiates for the seller to cover some of their closing costs, that credit comes off your proceeds. This is increasingly common in markets where buyers are stretched thin on cash.

9. HOA Transfer Fees (If Applicable) If your property is part of a homeowners association, there are typically HOA transfer and document fees. These vary by association.

10. Recording Fees and Miscellaneous The county charges a small fee to record the grant deed. There may also be wire transfer fees and notary fees associated with the transaction.

Real Example: Daly City Home We Sold at $1,260,000

Here is what the seller's closing costs looked like on a home we recently sold in Daly City for $1,260,000.

After accounting for closing costs and paying off the remaining mortgage balance, the seller received their net proceeds. That number is what matters, not the sale price on the offer. Your agent should hand you a completed seller's net sheet the moment you start seriously discussing a listing price.

What Happens When Offers Start Coming In?

Going on market is exciting, but it can also be overwhelming if you don't know what to expect. Here is a step-by-step look at what happens once offers arrive.

Step 1: Offer Review Date Your listing agent will typically set an offer review date, usually 7 to 10 days after going on market. This creates urgency among buyers and often results in multiple competing offers. You are not obligated to accept any offer before that date, and you can also receive pre-emptive offers if a buyer doesn't want to compete.

Step 2: Reading the Offer An offer is more than just a price. The key terms to review include:

• Purchase price — what the buyer is offering
• Earnest money deposit (EMD) — typically 1% to 3% of the purchase price; shows the buyer is serious
• Loan contingency — does the buyer need a loan to close? How long do they have to secure financing?
• Appraisal contingency — if the property appraises below the offer price, this gives the buyer a way out or the right to renegotiate
• Inspection contingency — gives the buyer a window to inspect and potentially cancel or renegotiate based on findings
• Close of escrow date — when does the buyer want to close? Typically 21 to 30 days for cash offers, 30 to 45 days for financed offers
• Seller rent-back — can you stay in the home after closing for a period of time if needed?

Step 3: Comparing Multiple Offers If you receive multiple offers, your agent will prepare a comparison spreadsheet showing price, contingencies, down payment, loan type, and other terms side by side. The highest offer is not always the strongest. A cash offer with no contingencies at $50,000 less than a financed offer with a loan contingency might actually be cleaner and safer to accept.

Step 4: Countering or Accepting Once you review offers, you have three options: accept as-is, counter with different terms, or reject. Most sellers counter at least once to improve the price or tighten the timeline. Your agent will guide you through this.

Step 5: Opening Escrow Once you accept an offer and both parties sign, the fully executed contract goes to the escrow company. The buyer's earnest money deposit is wired within the first few days. The clock starts on all contingency timelines.

Step 6: Contingency Period This is the period where the buyer completes their inspections, secures their loan, and reviews all disclosures. As the seller, you will complete and deliver disclosure forms during this period, including the Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), and any supplemental local disclosures. In the East Bay, buyers often request repairs or credits based on inspection findings. Your agent will help you decide what's worth negotiating.

Step 7: Contingency Removal Once the buyer is satisfied with inspections and has their loan locked, they remove contingencies in writing. This is a key milestone. At this point, the buyer's deposit becomes at-risk if they back out without cause.

Step 8: Signing and Close Near the close date, you will sign the grant deed and other closing documents through a mobile notary or at the title company. The buyer funds the transaction, the lender wires in the loan proceeds, and the county records the deed. Once recorded, the sale is complete and your net proceeds are wired to you.

Bottom Line for East Bay Sellers

Closing costs for a California home seller typically run between 7% and 10% of the sale price when you factor in commissions, taxes, and fees. On a $1,200,000 home, that's $84,000 to $120,000 coming off your gross sale price before you even account for your mortgage payoff. The best thing you can do before listing is sit down with your agent and go over a detailed seller's net sheet so there are no surprises when you get to the closing table.

If you're thinking about selling in Daly City, Pacifica, South San Francisco, or anywhere in the East Bay or Peninsula, reach out. We'll walk you through the numbers before you make any decisions.