Standard Closing Costs in San Francisco For Buyers and Sellers

If you are a San Francisco homebuyer or home seller, you probably want to know what the standard fees, aka “closings costs” are when buying or selling a home in San Francisco. Closing costs are the fees connected to the final step of a real estate transaction — the transfer of real property — and can contain many different components and vary from city to city, state to state, and county to county.

Many of the closing costs for home buyers and sellers in San Francisco prorate based on the sales price and timing of the sale. There are customary practices as to who pays what (buyer or seller) though in theory, everything is negotiable. Having an experienced San Francisco real estate agent at your side who understands the process is important.

San Francisco Closing Costs for Buyers

For buyers, some of the common fees you can expect to pay for during the escrow or at the closing are:

  • Real estate commission to cover your buyer agent’s fee, if not already paid for by the Seller. It is typically, but not always entirely, paid for by the Seller and baked into the sales price.
  • If you are obtaining a home loan:
    • Fees associated with your loan which vary by lender but are somewhat consistent with the major players.
    • Credit report
    • Loan points or origination fee, if any
    • Appraisal, as required by your lender
    • Proration of mortgage payment based on the closing date
  • Any home and property inspections you order
  • Attorney fees (not particularly common in a standard SF home purchase)
  • Proration of property tax based on the closing date
  • Fees associated with the escrow process
    • Document preparation
    • Escrow fee
    • Notary and courier fees
  • Title Insurance
  • Home owners insurance
  • Move-in fee (for some larger condo buildings)
  • Home owner’s association fees, if any, prorated on the closing date

MORE DETAIL: As a buyer, the cost of having a top San Francisco real estate agent working as your fiduciary representative is typically one of the seller’s closing costs. The seller pays the total commission to the listing agent who then offers a certain percentage to the buyer agent via the MLS listing.

There can be times when the buyer side commission offered is lower than your agent’s standard fee. In that case, you would make up the difference at the close of escrow as a part of your closing costs. You will know about this up-front, and it can be factored into the negotiations.

In San Francisco, it is standard for a buyer to pay between 1 to 2 percent of the loan amount of the home in closing fees though this can be lower or higher depending on your individual situation.

Here at Danielle Lazier Real Estate, our clients work with a select group of trust-worthy and reliable lenders. Ask for for recommendations to mortgage brokers and home loan lenders with competitive interest rates, low fees and great communication.

There are a few things you can do as a home buyer to prepare for the fees associated with closing costs. For example, lenders are required by law to provide a loan estimate that includes the closing costs of the home so it’s important to get your full loan pre-approval up-front so you have a truly accurate sense of your budget.

Standard Closing Costs in San Francisco for Home Sellers

For home sellers, some of the common fees you can expect to pay for during the escrow or at the closing are:

  • San Francisco city and county transfer tax (Learn how to calculate your SF transfer tax here.)
  • Real estate broker commission
  • Pre-sale inspections
  • Compliance with any California and San Francisco required ordinances such as energy and water conservation
  • Pre-sale enhancements when appropriate, such as painting, minor repairs, floor refinishing, lighting fixtures, garden clean-up, cleaning, etc.) Danielle Lazier Real Estate will advise on the most crucial fix-ups to bring you a substantial return on investment (ROI) and project manage from start to finish.
  • Professional home staging, when appropriate
  • Property taxes prorated based on the final closing date
  • Home owner’s association dues, move out and transfer fees, if any
  • Loan pay-offs, i.e. your proceeds will be used to pay off your current loan

MORE ON COMMISSION: Most of the time, the biggest expense for a home seller is the sales commission to the real estate agents. In an expensive real estate market like San Francisco, where the results can vary by tens of thousands, even hundreds of thousands of dollars based on the strategy you employ, choosing the right real estate agent is crucial. You do not want to leave money on the table or feel resentful about the fee.

We fully acknowledge that the commission is a lot of money. It may be tempting to hire the agent with the lower commission because it can seem like this is the way to net the most money. In theory, this makes a lot of sense.

Having worked with thousands of local San Francisco real estate agents over the past two decades, we know from experience that an agent’s ability to consult, negotiate and oversee the transaction at the highest levels is not a given and does impact your bottom line.

Consider this. The way an agent handles and negotiates for their own money (the commission) is the best indicator of how they’ll handle yours (the sales price).

Instead of focusing on fee, focus on track record and read reviews and talk to past clients to hear their thoughts. Did they feel that their agent left money on the table? Was their agent a skilled negotiator? Did they advocate for their money as if it was their own? Did they truly act as a fiduciary, putting their needs above their own?

Are you a San Francisco Bay Area home buyer or home seller? We’ve got a team with a great track record of happy clients and five star client reviews. Contact Danielle Lazier Real Estate. We’d love to hear from you!

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