Who Pays Closing Costs in a Cash Sale in California?
In most of the California cash sales I’ve been involved with, the buyer covers most of the transaction costs. The seller’s side depends on how the buyer structures the offer, and that varies more than most sellers going into a cash deal expect.
Do Cash Buyers Pay Closing Costs?
Cash buyers still pay closing costs, even without a lender in the transaction. The transfer tax and title insurance are still there, and so are escrow fees and recording costs.
The big difference from a financed transaction is the absence of the loan origination fee and the bank appraisal. Those two items together can add $3,000 to $6,000 to a financed buyer’s side of the closing statement, and a cash buyer skips both.
What the Buyer Typically Covers
In most cash transactions I’ve been part of, the buyer absorbs the documentary transfer tax and the owner’s title policy. The escrow fee runs on the buyer’s side for both halves as well, and in most Southern California deals those items together have come in somewhere between $4,000 and $7,000 depending on the city.
The transfer tax comes off the sale price rather than the loan balance or any other number, and in most of the counties where I’ve closed deals the base rate has run around $1.10 per $1,000. LA adds its own rate on top of that, which on a $450,000 sale has pushed the combined number well into the couple-thousand-dollar range before recording fees come in.
How Much Are Closing Costs on a Cash Deal?
On the cash sales we’ve closed, the buyer’s side has typically run somewhere between $3,000 and $7,000 depending on the city and sale price. That’s mainly the transfer tax and the title policy, with the escrow fee adding to it.
The seller’s side in a cash deal is usually pretty thin outside of the mortgage payoff and any liens. Prorations and HOA transfer fees are the main things left, and most sellers are surprised by how little comes off their column on the transaction cost side.
| Cost Item | Buyer or Seller | Typical Range |
|---|---|---|
| Documentary Transfer Tax | Buyer (varies by offer structure) | $1.10 per $1,000 + city rates |
| Owner’s Title Insurance | Buyer (varies by offer structure) | $800-$1,500 |
| Escrow Fees | Buyer (varies by offer structure) | $1,500-$2,500 |
| Recording Fees | Buyer | $100-$200 |
| Natural Hazard Disclosure Report | Seller | $70-$150 |
| Mortgage Payoff | Seller (from proceeds) | Varies |
| Property Tax Proration | Split by close date | Varies |
| HOA Transfer Fee | Seller (typically) | $200-$500 |
What Still Comes Off Your Proceeds
Mortgage payoff
A mortgage payoff comes out of your proceeds at close, the same as in any sale. The escrow officer handles the payoff before the wire goes out, and whatever’s left is what gets wired to you.
Liens
Any liens recorded against the parcel clear through escrow as well. The types that come up most often are contractor claims, judgment liens, and IRS or state tax attachments, and delinquent HOA assessments show up regularly too.
The title company tracks down each lienholder and gets a payoff demand before the close date. In most of the deals I’ve worked through, those amounts come out of proceeds on the closing statement rather than the seller needing to bring separate funds to close.
If you have a lien situation or aren’t sure what’s recorded against your property, a title officer or attorney can pull a preliminary report before any sale opens. Getting that done before you sign anything tends to prevent the surprises that slow escrow down.
Seller credits
A seller credit works differently from a price reduction even though the effect on your net is similar. The buyer asks for a credit against a known repair item or their closing costs, that amount shows up on the settlement statement as a reduction to your proceeds, and the offer price on paper stays the same.
I’ve seen credits come up in cash sales when an inspection surfaces something the seller would rather handle with cash than fix before close. On a roof replacement or an HVAC that’s at end of life, a credit keeps the deal moving without the seller having to coordinate contractors or come back to the table with a new number.
Property Tax and HOA Prorations
Property taxes
Property taxes get split between buyer and seller based on the day escrow funds. If taxes have been paid ahead and the sale closes mid-period, you get a credit for the buyer’s portion of that period.
If taxes are behind, your share of the shortfall comes out of proceeds before the balance wires to you. Most sellers don’t know which direction their proration is going to run until the preliminary settlement statement comes in.
HOA fees
HOA boards typically charge a document transfer fee when title changes, and some charge a move-out fee on top of that. The total usually runs somewhere between $200 and $500 depending on the association, and those fall on the seller’s side in most cases.
Most sellers who’ve been in their home for several years haven’t thought about prorations until the preliminary settlement statement lands. On any offer we make, we can give you a rough estimate of where those will fall so nothing on the settlement statement surprises you at close.
The natural hazard disclosure report is another item that shows up on the seller’s side in most California sales, cash included. It covers fire severity zones and other state-mapped hazard areas, and the vendor charge typically runs $70 to $150.
What “We Cover All Closing Costs” Actually Means
The phrase gets used loosely in this industry. Some buyers mean they’re covering their own side of the transaction and leaving transfer taxes and the owner’s title policy on the seller, and those two items alone can run $2,000 to $3,500 on a mid-range Southern California home.
Before signing with any buyer, ask directly whether the offer price is the number that gets wired to you or whether costs are still coming off at close. A buyer who can’t answer that clearly and put a written net sheet in front of you is worth pressing on before you commit.
The base county transfer tax rate in California is set by California Revenue and Taxation Code Section 11911, and cities like Los Angeles layer their own rates on top of that. The LA County Recorder’s office has the full breakdown if you want to see the rates by city.
How We Structure Our Offers
When we make a cash offer, the number we put in front of you is the number that gets wired to you at close. Every offer comes with a net sheet showing the offer price and what gets wired to you after any mortgage or lien payoffs clear through escrow.
We absorb the documentary transfer tax and the owner’s title policy on every deal we close. The escrow fee runs on our side for both halves, and so do recording fees.
Most sellers tell us they’ve never seen a net sheet from another buyer, and it’s the clearest way I know to show someone exactly where their money goes before anyone signs anything. The ones who’ve gotten it say they hadn’t fully understood the picture until they saw it laid out line by line.
Acacia Avenue, Desert Hot Springs
In August 2017 we closed on a house on Acacia Avenue in Desert Hot Springs for $165,000. The deal looked clean until escrow flagged a HERO solar lien recorded against the property tax bill.
The seller had signed a $29,235 PACE contract for panels worth maybe $8,640 installed. That lien transferred with the property at close, which meant she didn’t need to come up with the payoff out of pocket before the deal could fund.
We took on the PACE obligation at close and she walked away with her net on the $165,000. She didn’t have to negotiate with the program separately or find a buyer willing to take it on.
How This Compares to a Traditional Sale
I’ve had sellers call after getting a written offer from us and say the number looks lower than what they were expecting from a listing, and it usually is. The comparison they’re making is to a list price, not to what they’d actually net.
Commission in California has averaged 5 to 5.5 percent since commissions became fully negotiable after the August 2024 NAR settlement. Add in the seller’s closing costs and what came out of the inspection in repairs or buyer credits, and on a $450,000 sale you can realistically be looking at $35,000 to $42,000 coming off before anything hits your account.
When you run the net numbers side by side rather than comparing our offer to a list price, the spread is usually smaller than sellers expect. The full net comparison shows where that spread usually lands.
The cost comparison also doesn’t account for the cost of a failed escrow. If a financed buyer’s loan falls through after 45 days off market, the carrying costs and a price reduction to restart add up in ways that don’t appear on any net sheet.
If You Want to Know What You’d Walk Away With
We’ve been buying houses since 2008 across Riverside, San Bernardino, Los Angeles, Orange, and San Diego counties, and most of the title situations that slow deals down are ones we’ve worked through before. Call or text us at (951) 331-3844 or request an offer through our website.
We’ll put a number in front of you and show you exactly where it goes before you commit to anything. No obligation, and no costs coming back at you at close.
For context on what closing costs look like in a traditional California sale, the full closing cost breakdown covers each line item on both sides. The cash close timeline is also worth looking at if you’re weighing speed as part of the decision.
Doug Van Soest spent seven years as a certified residential appraiser starting in 2003 before co-founding SoCal Home Buyers with his wife Andrea Van Soest, CA DRE #01505854. Together they have closed over 400 transactions across Southern California.
