Wondering how much you will pay at the closing table in San Luis Obispo? Whether you are buying your first home or selling after many years, the line items can feel confusing. This guide breaks down what closing costs include, who typically pays what under local customs, and how taxes, prorations, and HOA fees work in SLO. You will leave with clear checklists and a simple example so you can plan with confidence. Let’s dive in.
What closing costs include
Closing costs are the third-party and government charges needed to transfer ownership and fund a loan. Many fees follow local custom, but most items are negotiable in your purchase contract. Some charges are fixed by a lender, title company, HOA, or the county, while others depend on your loan type and closing date.
Typical headline ranges in many California markets:
- Buyers: about 2 to 5% of the purchase price, excluding the down payment.
- Sellers: often 6 to 10% when you include broker commissions, payoffs, transfer taxes, and customary title and escrow charges. Commission terms are negotiated in your listing agreement.
Who pays what in San Luis Obispo
Local customs guide who pays each item, but you can negotiate many fees. Always confirm in your contract and with your escrow or title officer.
Buyer customary items
- Loan and lender fees: origination, processing, underwriting, discount points if any, appraisal, and credit report.
- Prepaid interest and reserves: interest from funding date to first payment, plus initial escrows for property taxes and insurance if your lender requires them.
- Lender’s title policy: protects the lender.
- Recording related to the loan: mortgage or deed of trust recording and related notary or courier fees.
- Inspections: general home inspection and pest inspection are commonly buyer-paid.
Seller customary items
- Real estate broker commissions: the largest seller cost and negotiated in your listing agreement.
- Owner’s title policy: commonly a seller cost in many California markets, though this can vary by county and is negotiable.
- Transfer taxes: documentary transfer tax is often a seller expense by custom, but confirm locally.
- Escrow fee share: escrow fees are commonly split between buyer and seller in California, subject to negotiation.
- Loan payoff and reconveyance: payoff of any existing mortgage and related recording fees.
- HOA demands and transfer paperwork: sellers often pay for HOA demand/estoppel and resale documents.
Items often negotiated
- Escrow fee split and who pays specific recording fees for the deed.
- Repairs, credits, or concessions following inspections.
- HOA transfer fees and move-in or move-out fees.
- Owner’s title policy if local practice differs or parties agree to reallocate.
Taxes and prorations to expect
Documentary transfer tax
A documentary transfer tax may apply to the sale. In many markets the seller pays this tax by custom, but it is negotiable and can be split. Exact rates can differ by county and city. For San Luis Obispo, confirm current rates and any city-level tax with the San Luis Obispo County Recorder and the City of San Luis Obispo finance department.
Property tax proration and supplemental bills
Property taxes are prorated at closing based on the county tax calendar and your closing date. When a home changes ownership, it can trigger a supplemental assessment that is billed after closing. The party responsible can be set by contract, so make sure the allocation of any supplemental bill is clear in your paperwork.
Special districts and Mello-Roos
Some SLO County properties fall within community facilities districts or have special assessments. Review your preliminary title report and HOA disclosures for any district taxes that will affect your ongoing costs.
HOA and condo fees you might see
If the property is in an HOA, expect a few additional line items at closing:
- HOA demand/estoppel: shows balances, dues, special assessments, and any compliance issues. Sellers often pay for this packet, but the contract can assign it differently.
- Transfer and move fees: many associations charge a transfer fee and sometimes move-in or move-out fees. Who pays is negotiable.
- Resale disclosures: fees for the HOA’s resale packet are common. Review reserves, planned projects, and any litigation disclosures because these can affect future costs.
Example closing math (illustrative)
Here is a simplified example to help you visualize how costs stack up. Numbers are examples only. Always obtain actual quotes from your lender, title, and escrow providers.
Example purchase price: $800,000
Buyer-side examples:
- Loan fees, appraisal, and credit report: about $1,000 to $3,000 depending on the lender.
- Lender’s title policy and title services: ranges from several hundred to over $1,000 based on filed rate tables.
- Escrow fee share: several hundred to about $1,500 if split.
- Recording fees, prepaid interest, and initial tax and insurance escrows: varies by loan terms and timing.
Seller-side examples:
- Commission: negotiated. For illustration, 5.5% of $800,000 would be $44,000, which is typically the largest seller cost.
- Owner’s title policy: one-time premium based on price and filed rates.
- Documentary transfer tax: confirm current county and any city rate and who is paying.
- Mortgage payoff, reconveyance, and recording: depends on the existing loan balance and lender fees.
Buyer checklist for a smooth SLO closing
- Bring valid ID and follow escrow’s secure wire instructions.
- Review your Loan Estimate and Closing Disclosure. Ask your lender to explain differences.
- Confirm who pays the owner’s title policy in your contract.
- Verify prorations for property taxes and HOA dues.
- Order inspections early and budget for appraisal, escrow, title, recording, and initial tax and insurance escrows.
- Request HOA documents early and note any transfer or move fees.
Seller checklist before closing
- Send deed and loan payoff details to escrow and request preliminary payoff figures.
- Order the HOA demand/estoppel and resale packet early to avoid delays.
- Review your settlement statement and confirm commission details.
- Budget for transfer taxes, owner’s title policy, escrow fee share, and any agreed credits or repairs.
- Work with escrow and title to clear any liens, judgments, or encroachments.
How to get exact numbers in SLO
- Ask your lender for a Loan Estimate up front and a Closing Disclosure before you sign. These show your borrower costs.
- Request fee quotes from your local title and escrow teams for the owner’s and lender’s title policies, escrow service, and recording charges.
- Confirm documentary transfer tax rates and recording fees with the San Luis Obispo County Recorder. Ask the City of San Luis Obispo finance team if any city-level transfer tax applies.
- Check with the County Treasurer-Tax Collector or Auditor-Controller on the tax calendar and how prorations will be calculated, and ask the County Assessor about supplemental assessments.
Buying or selling in San Luis Obispo should feel clear and predictable. If you would like local, hands-on guidance to map your exact closing costs and negotiate who pays what, reach out to Mike Oliver for a friendly, no-pressure conversation.
FAQs
Who usually pays escrow fees in San Luis Obispo?
- In many California transactions escrow fees are split between buyer and seller, but the contract controls and local practice can vary.
Who pays the owner’s title insurance policy in SLO?
- In many California markets the seller commonly pays the owner’s policy, though this is negotiable and should be confirmed in the contract.
Does the City of San Luis Obispo charge a transfer tax on top of the county tax?
- Some California cities do assess an additional transfer tax. Confirm current rates with the City of San Luis Obispo finance department and the County Recorder.
How are San Luis Obispo County property taxes prorated at closing?
- Escrow prorates taxes based on the county’s tax calendar and your closing date. A supplemental assessment can arrive after closing due to the change in ownership.
What is an HOA estoppel letter and who pays it?
- An HOA estoppel or demand discloses dues, balances, assessments, and compliance items. Sellers commonly pay for it, but the purchase contract can assign this cost to either party.
