Closing Costs are the various expenses related to finalizing a real estate transaction. These costs vary depending on the location of your home purchase or sale.
As a buyer or seller, you need to familiarize yourself with the various costs associated with your deal. Identifying these expenses beforehand will ensure you can properly budget for these costs.
Our blog post provides a comprehensive guide on Simi Valley Closing Costs that home buyers and sellers can reference for their transactions. You’ll also want to consult with your realtor as there may be some specialty charges for your specific deal.
If you’re interested in working with a local real estate team in Simi Valley, our team will be more than happy to represent you in your transaction. We’ve worked with several clients in the region and provide a transparent and highly professional work environment to ensure our clients get the best deal possible. Feel free to reach out to us today for any of your home buying or selling needs.
Simi Valley Closing Costs
Closing Costs in Simi Valley are categorized between buyers and sellers. Most of these are typically covered by one party or another. However, in some instances, you may negotiate with the other party to cover some of the costs.
For example, if you’re buying a property that has been on the market for a long time, the seller may be willing to cover some or all of the closing costs to finalize the deal.
Conversely, if there is high demand for a house, you may want to offer to pay for the closing costs that the seller normally covers to ensure you close on the deal.
Buyers Closing Costs
- A Title Insurance is a policy that covers buyers from possible financial expenses resulting from any issues with the title. This usually includes a title policy for the owner and a policy to protect the lender if the buyer gets financing.
- Your Title Insurance can cost anywhere between a few hundred to $2,000 depending on the property’s current value. A home priced at $200,000 will on average pay a title insurance fee of $1,374.
Property Taxes and Insurance
- Homebuyers are expected to pay for prepaid property taxes and insurance.
- Your insurance will typically cover any possible fire and liability expenses and costs around $900 to $1,200 per year. Earthquake insurance is separate from this and can cost you an additional $1,000 to $1,500 per year.
- Property Taxes in Ventura County are approximately 1.25% of the property’s value. For a $200,000 priced home, you can expect to pay $2,500.
Home Inspections and Appraisals
- When buying a home, you should never skimp out on the various home inspections and appraisals you need to do on a property. This will ensure you’re paying for the home’s actual value and avoid any surprise repair costs you might have to pay down the line.
- Inspection Fees vary depending on the size of a home. A 2,000 sqft home will generally cost you around $350 for an inspection. You’ll also want to do a termite inspection which can cost an additional $100.
- Other inspections you’ll want to have done include chimney, sewer, roof, HVAC system, plumbing, and electricity. These inspections will probably set you back another $500.
Sellers Closing Costs
Title Search Fees
- A Title Search Fee covers a search of records pertaining to your property to ensure the seller is the rightful owner. This is usually covered by the seller and is priced at around $200.
- A Title Search will ensure no potential problems for the buyer, including illegal deeds, liens, undiscovered wills, and forgeries.
- An Escrow Company acts as a 3rd party that holds all payments and documents related to a real estate transaction. An Escrow helps protect the assets of buyers and sellers until both parties have delivered on their responsibilities.
- Your Escrow Fee typically scales depending on the overall cost of a property. You can expect to pay between $1.5 to $2 per $1,000 plus $200.
- For example, if you’re buying a home, you can expect to pay $600. That’s (200 x $2 = $400) plus the flat rate of $200.
Agent Commission or FSBO Fees
- If you’re working with a realtor to sell your property, you will pay for their commission for finding a buyer for your home.
- You can expect to pay anywhere between 5% to 6% of the total value of your home for listing commissions and agent fees.
- For Sale By Owners (FSBO) Fees are charges included when a seller lists their property in a Multiple Listing Service.
- You’ll usually pay a fee of $95 and a 2% commission fee for listing your property.
Lowering Your Closing Costs
There are various ways you can save on your Closing Costs, and we provide some examples you can consider for your transaction. As always, check with your realtor which of these can work for your situation.
1. Compare Lenders
A great way to save on your closing costs if you plan to finance your home purchase is by talking to multiple lenders. Request a Loan Estimate Form, which itemizes all fees involved with your possible mortgage. Let them know you are talking to numerous lending companies, and don’t be afraid to ask for potential discounts. You can choose the best deal available once you have several Loan Estimate Forms to consider.
2. Negotiate Lender Fees
Some of the lender fees included in the Loan Estimate Form can be optional. Have your lender explain charges you’re unfamiliar with and ask if they can be removed.
3. Get Good Deals
You can negotiate price quotes for other services included in your home purchase/sale. Fees you may be able to negotiate, include your home inspection, title insurance, title search, commission fee, etc.
4. Negotiate with Buyer/Seller
Depending on how badly the other party wants to close the deal, you can have them cover some or all of your closing costs.
5. Close at the End of the Month
Closing at the end of the month can help you save on your “per diem” interest for the month.
The most crucial consideration for closing costs is communicating correctly with your realtor and family. You want to have a clear picture of the total expense and plan accordingly.
These costs may seem trivial when compared to other larger payments, especially when you’re the one buying a home. However, if you don’t include them in your budget, it can hurt you down the line.
Thank you for reading through our article about Closing Costs in Simi Valley. Should you have additional questions about this topic or need a consultation, please don’t hesitate to contact me today. We’ll be glad to provide you with the necessary information you need to make a buying/selling decision.