Who Pays For What in a Typical Residential Real Estate Transaction?

The SELLER can generally be expected to pay:

  • Real Estate Commission
  • Document preparation fee for deed
  • Documentary transfer tax, if any
  • Payoff of all loans in Seller’s name
  • Interest accrued to lender being paid off
  • Statement fees, reconveyance fees and any prepayment penalties
  • Termite inspection (or according to contract)
  • Termite work (or according to contract)
  • Home warranty (or according to contract)
  • Any judgments, tax liens, etc., against the Seller
  • Tax proration (for any taxes unpaid at time of transfer of title)
  • Any unpaid homeowners dues
  • Recording charges to clear all document of record against Seller
  • Any bonds or assessments (or according to contract)
  • Any and all delinquent taxes
  • Seller Notary fees
  • Escrow fee (one half)
  • Title insurance premium for owner’s policy
  • Homeowner’s transfer fee
  • City transfer/conveyance tax (or according to contract)

The BUYER can generally be expected to pay:

  • Title insurance premium for Lender’s policy
  • Escrow fee (one half)
  • Document preparation (if applicable)
  • Buyer Notary fees
  • Recording charges for all documents in Buyer’s name
  • Tax proration (from date of acquisition)
  • All new loan charges (except those required by Lender for Seller to pay)
  • Interest on new loan from date of funding to 30 days prior to first payment date
  • Assumption/change of records fees for takeover of existing loan
  • Beneficiary statement fee for assumption of existing loan
  • Inspection fees (roofing, property inspection, geological, etc.)
  • Fire insurance premium for first year

YOURS or THEIRSThe Personal vs. Real Property Dilemma

The distinction between personal property and real property can be the source of difficulties in a real estate transaction. A purchase contract is normally written to include all real property, that is, all aspects of the property that are fastened down or an integral part of the structure. For example, this would include light fixtures, drapery rods, attached mirrors, trees and shrubs in the ground. It would not include potted plants, free-standing refrigerators, washer/dryers, microwaves, bookcases, swag lamps, etc.

If there is any uncertainty whether an item is included in the sale or not, it is best to be sure that the particular item is mentioned in the purchase agreement as being included or excluded.

Published by Brett Littlewood

Brett Littlewood was born in La Jolla and has been in business for over a decade. He is surrounded by his family, friends, and network of experts across many industries and professions. Brett has been working with clients regarding real estate, wealth strategies, and marketing along the coast of California. With his extensive skills and mastery of the San Diego market, he is a knowledgeable and visionary leader. Brett prides himself in the personalized attention he gives to his clients unique needs. He can help you with your residential, investment, and commercial properties. His team specializes in the sale and acquisition of 1031 Tax Deferred Exchanges.

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