Selling your house can be costly. When the time comes to downsize or sell your home, there are a few financial aspects to consider, especially in the area of closing costs. If you’re hoping to pay off your existing mortgage in full, or maximize your profit to fund retirement, make sure you understand all of the fees associates with the sale of your home.

Real estate transaction fees are typically equal to a percentage of the sale. The closing costs, realtor, escrow, and attorney fees, and potential for repairs, can get expensive. Knowing all of your options up front will help you make the best financial decision for your future.

Building equity in your home is one of the perks of home buying. Don’t lose your nest egg to high fees and sale costs. If now is the time to sell your home, make sure you know exactly what to expect when it comes to closing costs and other financial obligations. A private sale may cost you more than it’s worth. Find out in our guide.

What happens to the equity in your home after selling?

When you sell your home, the equity is your profit. For example, when you buy a home for $300,000 and pay off $200,000 prior to selling, you could net $200,000 in profits after paying off the remaining $100,000 balance of your mortgage.

You’ll net this amount as long as you don’t have any other liens or other financial obligations assigned to your home. When selling your home, it is possible to absorb some of the costs of the sale, such as the realtor fees, and closing costs, to incentivize a buyer to move forward with the purchase.

The funds will essentially be deducted from your profits.

Oftentimes, a buyer will submit an offer with a request for the seller to absorb some of the closing costs so the buyer doesn’t have to pay out of pocket or roll it into their mortgage payment. When the seller concedes to some of the closing costs, it’s reduced from the overall profit, or net equity on the home.

7 Things every seller should know about closing costs

Whether you’re selling a home or purchasing, closing costs are one of the most pressing matters to address. When a seller is hoping to reduce their upfront costs or avoid rolling any additional payments into their monthly mortgage payment, they might request concessions from the seller.

Absorbing closing costs is a common tactic used to motivate buyers and sell your house quickly. The longer a house stays on the market, the harder it is to sell. Most sellers end up having to reduce their initial selling price if it stays on the market too long, which cuts into profits even further.

Make the best decision for your financial future by educating yourself on all of the potential fees that could be incurred from the sale of your home.

1. What are closing costs?

What are closing costs?

Closing costs include all fees associated with the sale or purchase of a home.

All closing costs must be paid in advance of the transfer of property from one owner to the next.  If the sellers are responsible for payment of the closing costs, they will either present a check at the closing or they will roll the costs into their monthly mortgage payments, in which case they will not be required to make an additional payment at the closing.

Closing costs are not the same as a down payment. The down payment is the percentage of the sale price that the buyer is required to give the seller. A down payment shows the bank a vested interest in the property, making foreclosure less likely.

A down payment is made once an offer is accepted, at the beginning of the buying process. Typically it’s put into escrow during the buying process while inspections and other housekeeping matters take place.

Closing costs will be the final payment a buyer pays prior to signing the paperwork. This payment is made at the very end of the buying process.

2. What’s included in closing costs?

What's included in closing costs?

Closing costs are meant to cover a wide variety of fees associated with the purchase of a home. Once the home buying process is initiated, fees will begin to incur. From the realtor commissions to obtaining the buyer’s credit report and checking the title on a house, fees are constantly stacking up.

Typical closing costs consist of:

  • Realtor fees
  • Credit reports
  • Title fees
  • Origination fees
  • Appraisal fees
  • Surveys
  • Taxes

There are other expenses included depending on the details of the transaction. Before the real estate transaction can close and the property can transfer ownership, the closing costs must be paid.

If the seller is paying the closing costs, or partial costs, those fees will be deducted from the sale of the home. If the buyer is paying closing costs, a check is required to be presented at the closing.

3. Who pays for closing costs?

Who pays for closing costs?

There is no obligation on either side to pay closing costs. Many buyers use closing cost concessions as a negotiation tool in order to get a better deal on a new home purchase.

For example, a couple looking to purchase a $150,000 home with a total savings of $30,000, could request the seller pay the closing costs of approximately $4,500, so they can use their full savings for the down payment.

The down payment needs to be at least twenty percent for the buyer to avoid paying private mortgage insurance. If the buyers don’t have enough in their savings to cover all of the closing costs plus the down payment, a seller can absorb the burden and still move forward with the sale of the home.

Using incentives like paying closing costs keeps a buyer interested. If you need to sell your home quickly, or you’re concerned about the amount of time that it’s been on the market, offering to pay closing costs is a great way to help attract motivated buyers.

4. Average closing costs for a seller in california

Average closing costs for a seller in California

Most people can expect to pay between two and five percent of the total cost of the home for closing costs.

The average cost of a home in California was $440,000 in 2015. If a buyer requested closing costs to be paid as a part of a sale, the seller could be responsible for up to $22,000.

If you’re anticipating a $100,000 profit from the sale of your home and end up paying $22,000 in closing costs, you’ll net less than 80% of your anticipated profit.

Preparing in advance for the cost of closing helps a seller either price their home differently, or look for alternative ways to sell their home that doesn’t include closing costs.

Considering the high price of homes in California, closing costs are significantly higher than in the rest of the country.

A seller could end up with a significant reduction in profit if they absorb the closing costs for the sale of their home. A buyer may be required to put down a large amount of money in addition to their down payment if a seller is unwilling or unable to make closing cost concessions.

The cost of fees involved could impact how quickly a house is sold. If the closing costs and down payment are high and the seller doesn’t offer concessions, a buyer may not be motivated to move forward with a purchase.

5. How to calculate your closing costs

How to Calculate Closing Costs

It’s difficult to know the exact costs that will be paid over the purchasing period, estimate between two and five percent to be safe. For example, if you’re looking to purchase a $350,000 home, you can anticipate closing costs between $7,000 and $17,500.

If you’re a seller looking to motivate a buyer by offering to pay closing costs, you could potentially be responsible for over $17,000.

Oftentimes, a buyer and seller will negotiate a compromise where one party agrees to pay a certain amount of closing costs and the other party is responsible for the remainder.

Since the sale of a home depends greatly on the current market, location, condition of the home, and other variable factors, sellers may need to offer incentives and take on more of the financial burden of the associated fees.

6. Is it worth it to pay a buyer’s closing costs?

Should you pay the buyers closing costs?

Since the sale of a house depends on many different key factors, sellers should be prepared to offer motivation.

During a buyer’s market, there are a lot of different options for buyers. They don’t feel a sense of urgency or motivation to make a purchase that isn’t attractive.

In order to sell your home in a buyer’s market, you have to make the purchase appealing, usually by offering financial incentive like the payment of closing costs.

Another reason sellers may need to incentivize buyers is the condition of the home. If your home is outdated in areas like the kitchen or bathroom and requires any major repairs, or may require major repairs in the next five years, offering to cover closing costs may help offset these renovation costs.

7. How to avoid paying closing costs

How to avoid paying closing costs

There are a few ways to avoid paying closing costs.

Your first option is to not offer to pay closing costs for a potential buyer. The pro of this option is that you will be able to net all of your equity. The cons are, you may not sell your house quickly and the longer it’s on the market, the longer it may stay on the market or you may end up having to reduce the sale price.

When reducing a sale price, you could end up losing as much as the closing costs anyway.

Your second option is to sell your home to SoCal Home Buyers. We make the selling process fast, easy, and simple.

Buyers are able to bypass the stress, hassle, and unpredictable costs of the selling process when they work with SoCal Home Buyers.

A Simpler Way to Sell Your Home

SoCal Home Buyers Happy Seller
“I felt the price was fair and consistent with the condition of the house. I wish more things in life would be this pleasant. Thank you!” – Richard C.

SoCal Home Buyers has been helping sellers for over twelve years and can guarantee a fast, smooth and painless transaction.

Specializing in helping buyers with a seamless selling process, you can avoid the unexpected closing costs, stress and hassle associated with selling a home on the real estate market.

You earned the equity in your home and deserve to access every cent. Working with SoCal Home Buyers to avoid paying closing costs helps you get the most for your home with the least amount of hassle – guaranteed!


Call SoCal Home Buyers today: 951-331-3844 or request a cash offer below to sell your house without closing costs, escrow fees, agent commissions or the uncertainty of falling out of escrow!

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This organization is run by a wonderful group of people who are easy to work with and have excellent communication skills. Looking forward to working with you again in the near future!
Steve Doan
Steve D.
16:51 16 Aug 19
The team members at So Cal Home Buyers were friendly, courteous, and very professional. I was very hesitant to sell my home, but felt very comfortable with this company’s honesty and business ethics. The team members made the process of selling my home comfortable to fit my needs and timeline. I would strongly encourage anyone looking to sell their home to contact So Cal Home Buyers first before signing a contract with any other agency.
Barbara Jones
Barbara J.
20:49 09 Jul 19
At one of the most stressful moments in my life, I was quite fortunate to have SoCal Home Buyers by my side. The family owned business was understanding, ethical, and professional in handling the sale of my parent’s home. Doug and his lovely wife offered support in all aspects including providing an excellent escrow company which always answered my quite numerous questions. I feel very blessed to have had SoCal by my side!
Michele Goddard
Michele G.
03:28 06 Jun 19
Doug & his team provide a great service. Highly recommended!!
Andrew M
Andrew M
16:56 07 Apr 19
Timely and smooth process. Friendly and professional staff. They understood my needs as a seller and went over and above to meet those needs. Highly recommend! ~Aaron & Kim Hall
Kim Johnston Hall
Kim Johnston H.
02:42 15 Feb 19
Professional, fair and accommodating, So Cal Home Buyers were ideal partners through a difficult situation. Their team is friendly and efficient. They are going to assist you through your predicament with clarity and integrity.You really should make them your first call!😃
Ron Rios
Ron R.
10:08 31 Jan 19
SoCal Homebuyers are great! They were professional and friendly to work with on a complicated property. The staff is excellent. Especially Danielle Lane, shes knowledgeable and patiently explained every detail in the process. Thank you SoCal Homebuyers, from the beginning to the end you were excellent.
mike estus
mike E.
19:03 28 Nov 18
amazing experience and worked great with us. everyone was very helpful and everything with smooth. I would highly recommend them to anyone who needs to sale a house fast without any bumps in the road.
Kaila Stephens
Kaila S.
01:19 22 Nov 18
Professional, courteous and willing to help through the entire process, which was fast and easy. I definitely recommend So Cal Home Buyers.
Snowy Weather
Snowy W.
01:01 08 Oct 18
After lots of research and reaching out to different companies about selling our home we decided to go with So Cal Home Buyers. They were the most...
Christina H.
Christina H.
15:43 05 Oct 18
We had many offers but we choose them because of there attitude and personality and they were great with answering questions for us his first time homesellers and we would highly recommend them for you as well
William Maurice
William M.
01:09 21 Feb 18
Great people. fantastic. contacted them right before the xmas holiday. thought would not get any reply till new year. LO and behold - had offer next day. after the holidays, stopped by office and took their offer. closed 2 weeks later. they offered a good price, walkthru inspection was easy, and all was done in 30 days of offer. all i can say - awesome. reliable, fair, courteous, and helpful. highly recommend them fort your home sale. quick, simple, fai, easy and most of all painless process of selling. (they handled all the closing and other paperwork).
Michelle Walton
Michelle W.
18:07 25 Jan 18
Southern California Home Buyers are very professional and very easy to work with. They give you weekly updates to make sure everyone stays in the loop. You are always able to reach them via phone,text, or email. This transaction has been a great experience for my parent's and I. I would highly recommend them to my friends and family.
Chantel Hawthorne Rizo
Chantel Hawthorne R.
18:00 05 Dec 17
They where great everything was done professional and fast service,no complaints
Cecil Howerton
Cecil H.
21:36 27 Nov 17
An outstanding experience!! Would highly recommend this company!! It came to us by way of a television commercial right at the time when I was dealing with an other company and was having a very frustrating time, from the very first conversation with them I canceled the other company and moved forward. Great process, outcome and more importantly great people!!
Victor Ontiveros
Victor O.
03:32 15 Nov 17
Highly recommended, Danielle was very professional and pleasant, would definitely work with these guys again, if you want to sell your house these are the guys, thanks
Mike Bennett
Mike B.
10:01 20 Oct 17
Howard Snyder
Howard S.
16:33 29 Aug 17
From our first phone call everything went well. We actually cancelledour appt. but Allison called us back & that turned out great. Glad she did.. Escrowwas made painless with the help of a great staff, Kristen, Jaime, & Danielle. This was very helpful as we live 6 hours away. First impressions are important & ourmeeting with Gavino to look at the property & explain things set the tone for a very good experience. Many Thanks to the staff for your Hard Work.Janie & David Belk
Michelle Belk Corn
Michelle Belk C.
14:02 01 Feb 17
SCHB is an awsome company. They were there all the time through the whole process. I would highly recommend this organization to anyone that wants efficient results at a bargain price.Southern California Home Buyers all the way.
Jeffery Caruthers
Jeffery C.
19:45 02 Dec 16
Working with SoCal Home Buyers made a bad experience so much better. Thank you Lisa and Kristen for being so wonderful!
Keri Angerman
Keri A.
15:32 09 Nov 16
I will definitely refer my clients to them!
Rasheena mccord
Rasheena M.
17:40 19 Jan 16
Doug & his team provide an awesome service for home owners. He's quick to respond, helps you through every step and doesn't low ball the offer he makes on your home. Highly recommended!
Laura Manzano
Laura M.
19:00 03 Jan 15


Doug Van Soest
Doug Van Soest

Hi I'm Doug! I'm a professional Investor here in SoCal. My wife Andrea and I have been purchasing homes for over 12 years and have helped over 500+ happy sellers just like you. If you'd like to remove the burden of finding a buyer and eliminate a lot of stress from selling your home we can genuinely help your situation.