Closing costs in La Jolla: title, escrow, loan fees, taxes and prepaid items

What closing costs mean

Closing costs are the fees and charges a buyer or seller may pay beyond the price of the home. This page explains the main kinds. It does not give a total, and it does not tell you to accept or reject any charge.

In this guide:

• Title costs: the report on the home’s ownership record, and title insurance
• Escrow fees: what the neutral middleman charges
• Loan fees, if you borrow
• Transfer tax: a tax paid when a home changes hands, plus county recording fees
• Prepaid items and prorations (costs split by date)
• Where to read more: cost to sell, seller net sheet, guides and buying & selling

Our sources are the California Department of Real Estate (DRE), the state office that licenses agents, and the Consumer Financial Protection Bureau (CFPB), a federal agency. They do not replace advice on your closing statement or tax return.

Title costs

Escrow is the neutral company that holds money and papers until closing. It usually orders a title search and a Preliminary Report, then sets up title insurance as the written escrow instructions say.

What to look for (the exact lines are on your closing statement; check with escrow and the title company):

• Preliminary Report: the title company’s list of recorded items that affect the home, such as loans or liens, before closing
• Owner’s title insurance: protects the owner against certain ownership problems; the contract says who pays
• Lender’s title insurance: if there is a loan, the lender usually requires its own policy
• Recording items: papers escrow files with the title company and county recorder

The DRE says that in Southern California, sellers often pay for title insurance and the county transfer tax and split the escrow fee with the buyer. Customs vary, and your contract can say otherwise. Ask your lawyer and escrow.

For seller costs, see cost to sell.

Escrow fees

The DRE says escrow fees are not set by law or by the State. They usually depend on the size and difficulty of the sale, the work done, overhead and risk. They can differ by escrow company and area. There may be extra charges, for example for preparing the deed, working with the lender, or printing papers.

• Escrow fees are only part of closing costs. Title companies, mortgage brokers and lenders may charge fees escrow does not control.
• Buyer and seller often split the escrow fee, but the contract decides. In a refinance, the borrower usually pays it.
• Ask early for an estimated closing statement. Compare it to the final closing statement.
• Check escrow fees with your escrow officer.

Loan fees, if you borrow

The CFPB sorts upfront mortgage costs into groups like these:

• Origination and lender charges: what the lender charges to make the loan. Names vary (such as application, loan review or processing). The total matters more than the name.
• Points: an optional upfront fee to lower your interest rate, figured as a percent of the loan. Ask your lender for the numbers.
• Outside services the loan needs: for example the appraisal (an expert’s opinion of value) and lender title. You can shop for some of these.
• Prepaid costs and first escrow deposits: interest from closing to month end, often the first year of home insurance, and money set aside for future taxes and insurance.

The CFPB says a Closing Disclosure is a form that lists your final loan terms, monthly payments and closing costs. For most mortgages, the lender must give it to you at least three business days before you close, so you can compare it to your Loan Estimate (the earlier cost estimate). Check the dates for your own closing.

A cash purchase has no loan fees. Title, escrow, transfer and proration costs may still apply.

Transfer taxes and government fees

The CFPB says local governments may charge fees tied to the sale or the mortgage. These usually do not change based on which lender you use.

Common ones in coastal San Diego:

• Documentary transfer tax: a local tax paid when the deed (the paper that transfers ownership) is recorded
• Recording fees: county charges on the public fee list
• Related report fees, when they apply, such as a Preliminary Change of Ownership Report (a county form about the new owner); escrow can explain

Public transfer tax rates, with sources, are on cost to sell. Check your deed with your escrow officer and the San Diego County office that keeps property records (the Assessor/Recorder/County Clerk). Your closing statement shows the full total.

Prepaid items and prorations

Prepaid items are costs paid at closing for time after the closing date. Examples from the CFPB and DRE: interest on a new loan, home or fire insurance, and first deposits into the lender’s escrow account for future property taxes and insurance.

Prorations split costs and income by date, so buyer and seller each pay their fair share for the time they own the home. The DRE lists property taxes, rent, security deposits, insurance, interest and HOA (homeowners association) dues. The split date is set in the written instructions, often tied to the contract or move-in date.

• Prepaid and prorated amounts are paid ahead and then settled between buyer and seller.
• The tax effects of a sale are separate from these fees. Ask a tax adviser and, when needed, the county property tax office.

Where this fits with other guides

You can talk about fees with Weston directly. This form does not give a commission quote.