Buying or selling in San Luis Obispo and not sure what you’ll owe at closing? You’re not alone. Closing costs can feel like a moving target, and the details matter when you’re planning your budget or deciding when to list. In this guide, you’ll learn what typical fees look like for SLO buyers and sellers, who usually pays what in California, and how to estimate your cash to close or net proceeds with confidence. Let’s dive in.
What closing costs include
Closing costs are one-time fees and prepaids due at the end of the transaction. They are separate from your down payment. These costs cover services such as lender fees, title and escrow, recording, transfer taxes, insurance, and prorations for property taxes and HOA dues.
For buyers, your total “cash to close” includes down payment, buyer closing costs, and prepaids, minus any lender credits. For sellers, your “net proceeds” equal the sale price minus seller closing costs, loan payoffs, prorations, and any credits you agreed to provide.
Who pays what in SLO
Customs vary by market and are negotiable in the contract, but the items below reflect common California practices.
Buyer costs at a glance
- Lender fees such as origination, underwriting, and processing, typically 0.5% to 1.5% of the loan amount.
- Discount points if you choose to buy down your rate, often 0% to 2% of the loan amount.
- Appraisal, often 450 to 900 dollars in SLO County.
- Credit report and application-related charges, usually under a few hundred dollars combined.
- Lender’s title insurance policy and related title charges.
- Escrow fee, commonly split with the seller. Buyer share is often 500 to 2,000 dollars depending on price and company.
- County recording fees for the deed and loan, typically in the low hundreds.
- Prepaid property taxes and insurance, plus initial escrow reserves for taxes and insurance, often equal to a few months of each.
- HOA transfer or document fees, if applicable, often 100 to 400 dollars.
- Miscellaneous items such as notary, flood certification, or a home warranty if you elect to purchase one.
A rough rule of thumb for buyers in California is about 2% to 5% of the purchase price, before any credits.
Seller costs at a glance
- Real estate commission, often the largest line item. Typical combined commission in California is about 5% to 6% of the sale price. Commission is negotiable.
- Owner’s title insurance policy, commonly a seller-paid item in many California markets.
- Escrow fee, typically split with the buyer. Seller share often runs 500 to 2,000 dollars.
- County and possibly city transfer tax, plus recording or reconveyance fees.
- Payoff of existing mortgage(s) and any related fees.
- Prorated property taxes and any HOA amounts through the closing date.
- Repairs, concessions, or holdbacks negotiated during contingencies.
- Optional home warranty if you choose to provide one.
With commission included, total seller costs commonly land in the 6% to 10% range of the sale price before loan payoffs and prorations.
Transfer taxes and local checks
San Luis Obispo County follows California’s documentary transfer tax framework. A common California county rate is 1.10 dollars per 1,000 dollars of price, but city-level taxes or fees may also apply inside city limits. Always confirm current transfer tax and recording charges with the SLO County Recorder and the City of San Luis Obispo Finance department when applicable.
How much to budget
For buyers
Plan for 2% to 5% of the purchase price in closing costs and prepaids. Your exact number depends on your loan type, lender fees, points, the closing date’s impact on prepaid interest and tax reserves, insurance premiums, and HOA charges.
For sellers
Plan for 6% to 10% of the sale price, including commission, title and escrow, and transfer taxes, before accounting for any mortgage payoff. Your exact number depends on your commission agreement, negotiated credits, and your payoff amount.
Estimate buyer cash to close
Here is the basic formula:
Cash to close = Down payment + Buyer closing costs + Prepaids and escrow reserves − Lender credits
Example: 700,000 dollar purchase
- 20% down payment: 140,000 dollars
- Closing costs at 3%: 21,000 dollars
- Prepaids and reserves estimate: 3,500 dollars
- Estimated cash to close: about 164,500 dollars before any credits
Example: 500,000 dollar purchase
- 5% down payment: 25,000 dollars
- Closing costs at 3%: 15,000 dollars
- Prepaids and reserves estimate: 2,500 dollars
- Estimated cash to close: about 42,500 dollars before any credits
Tip: If you plan to pay discount points to lower your rate, add those to your closing costs. If you receive lender or seller credits, subtract them.
Estimate seller net proceeds
Here is the basic formula:
Net proceeds = Sale price − Seller closing costs − Loan payoff(s) − Prorated taxes − Any seller-paid concessions
Example: 700,000 dollar sale
- Commission at 5%: 35,000 dollars
- Title, escrow, and other: 2,000 dollars
- Transfer tax at about 0.11%: 770 dollars
- Mortgage payoff: 250,000 dollars
- Prorated taxes and HOA: 2,000 dollars
- Estimated net proceeds: about 410,230 dollars
Example: 1,000,000 dollar sale
- Commission at 5.5%: 55,000 dollars
- Title, escrow, and other: 2,200 dollars
- Transfer tax at about 0.11%: 1,100 dollars
- Mortgage payoff: 400,000 dollars
- Prorated taxes and HOA: 3,000 dollars
- Estimated net proceeds: about 538,700 dollars
Quick DIY worksheets
Buyer worksheet
- Purchase price: ________
- Down payment: ________
- Closing costs estimate (2% to 5%): ________
- Prepaids and reserves: ________
- Lender or seller credits: ________
- Estimated cash to close: Down payment + costs + prepaids − credits
Seller worksheet
- Sale price: ________
- Commission % and amount: ________
- Title, escrow, and other: ________
- Transfer tax: ________
- Loan payoff(s): ________
- Prorated taxes and HOA: ________
- Net proceeds: Price − costs − payoffs − prorations
Local factors that change totals
- Transfer tax and recording. County and city policies affect your totals. Confirm with the SLO County Recorder and the City Finance department for in-city properties.
- Escrow and title allocation. In California, parties often split escrow fees, and sellers commonly cover the owner’s title policy. This is negotiable.
- Taxes and timing. Closing near tax due dates can change tax prorations and the size of your escrow reserves. California’s Prop 13 rules affect assessed value, and Proposition 19 can affect assessed value transfers in certain cases.
- Loan type and points. Low-down-payment loans, mortgage insurance, and discount points can increase buyer costs.
- HOA and community fees. Document and transfer fees vary by association and can add up.
- Repairs and credits. Post-inspection negotiations may shift costs between parties.
Ways to reduce closing costs
For buyers
- Compare Loan Estimates from multiple lenders to evaluate origination, points, and third-party fees.
- Request a seller credit in your offer if the market allows.
- Explore down payment and closing cost assistance through statewide programs and local city or county options if you qualify.
- Consider your rate strategy. Skipping points lowers cash to close but may raise your monthly payment.
- Ask for a preliminary estimate from escrow and title as soon as you are under contract.
For sellers
- Review your commission agreement and overall marketing plan to confirm value and services.
- Address repair items early or consider a credit in lieu of repairs to keep timelines predictable.
- Request your payoff demand early to avoid rush fees and delays.
- Confirm who pays for title, escrow, transfer tax, and HOA items in the contract to prevent surprises.
What to do next
- Buyers: get written Loan Estimates from at least two lenders, then request a fee quote from escrow and title once you are in contract.
- Sellers: ask for a detailed net sheet based on your likely sale price and loan payoff, then verify county transfer tax and recording fees.
- Both: review your preliminary closing statement as soon as it is available so there is time to adjust.
If you want a clear, local estimate tailored to your San Luis Obispo property or purchase plan, reach out. Our team lives and works here and can walk you through each line item, timing considerations, and negotiation strategies. Connect with Mike Oliver for a straightforward plan and next steps.
FAQs
Who typically pays escrow and title fees in San Luis Obispo?
- In many California transactions, buyers and sellers split escrow fees, and sellers often pay for the owner’s title policy. The allocation is negotiable and should be confirmed in your contract.
What is the transfer tax for a San Luis Obispo home sale?
- A common California county transfer tax is 1.10 dollars per 1,000 dollars of price, and some cities add a municipal tax or fee. Verify current rates with the county and city for the specific property.
How much should a San Luis Obispo buyer budget for closing costs?
- A practical estimate is 2% to 5% of the purchase price, plus your down payment. Your total depends on lender fees, points, taxes, insurance, HOA, and the closing date.
How much should a San Luis Obispo seller budget for closing costs?
- Including commission, title and escrow, and transfer tax, many sellers see 6% to 10% of the sale price in costs before loan payoffs and prorations.
Can a buyer roll closing costs into the mortgage in California?
- Some costs can be financed if your loan program and appraisal support the higher amount, or you can request seller credits. Financing costs increases your loan balance and monthly payment.
Do sellers always pay the owner’s title insurance policy?
- In many California markets, sellers pay for the owner’s title policy, but this is negotiable. Ask for a title fee estimate early so you know the exact numbers.
When will I see the final closing figures?
- Buyers must receive a Closing Disclosure at least three business days before closing. Sellers typically receive a settlement statement shortly before closing for review.
