Wondering what closing costs look like in Santa Clara and how much you should budget? You are not alone. With home prices higher than the national average, even standard fees can add up quickly here. In this guide, you will learn what closing costs cover, who typically pays what, local items that can impact your bottom line, and practical steps to plan ahead. Let’s dive in.
What closing costs cover
Closing costs are the one-time expenses, prepaid items, prorations, and taxes you pay at the end of a real estate transaction. They are separate from your down payment and the purchase price. Some are tied to your loan, while others relate to title, escrow, taxes, or inspections. A few items are negotiable and may shift between buyer and seller.
Who pays what in Santa Clara
Many line items follow local custom, but most are negotiable and defined in your purchase contract. In California, it is common for buyers to cover lender fees, appraisal, and the lender’s title policy, while sellers often pay real estate commission and may pay for the owner’s title policy. That said, customs can vary by city and by escrow company, so confirm with your escrow officer. Also verify any documentary or city transfer taxes with the Santa Clara County Clerk-Recorder and the City of Santa Clara.
Buyer closing costs
Lender and appraisal fees
You typically pay loan origination or application fees, appraisal, credit report, and underwriting. If you choose to buy discount points to lower your rate, that cost is added at closing. Lender charges must appear on your Loan Estimate and Closing Disclosure if you are financing.
Title, escrow, and recording
Buyers usually pay for the lender’s title insurance policy and often share escrow fees. You generally pay county recording fees for your mortgage documents. Who pays for the owner’s title policy can vary by local custom and is negotiable in the contract.
Inspections and HOA items
You usually pay for home inspections, pest inspections, and any specialized checks like roof, sewer, or chimney. In communities with homeowners associations, there may be transfer or document fees that are assigned by contract or local custom.
Prepaid items and deposits
Expect prepaids for homeowners insurance, property tax escrows, and daily interest from the closing date to your first payment. Lenders set escrow deposits based on local tax schedules and any special assessments on the property.
What to budget as a buyer
Buyers commonly estimate 2% to 5% of the purchase price for closing costs when financing, not counting the down payment. In a high-price market like Santa Clara, those percentages translate into large dollar amounts. Always confirm with your lender and escrow team for accurate figures.
- Example only: On a $1,000,000 purchase, a 2% to 4% range equals about $20,000 to $40,000 in closing costs. This can include lender fees, appraisal, title and escrow, prepaids for taxes and insurance, and inspections.
Seller closing costs
Commission
The largest single line item for most sellers is the real estate commission. Commission rates are negotiable and commonly near 5% to 6% of the sale price in many markets. Your listing agreement defines the amount and how it is paid from escrow.
Transfer tax, title, and escrow
Sellers often share escrow fees and may pay for the owner’s title policy depending on local custom and negotiation. Documentary or city transfer taxes can apply at closing, so verify whether the City of Santa Clara imposes a local transfer tax in addition to the county tax. Recording and reconveyance fees may also apply when your mortgage is paid off.
Payoffs, prorations, and repairs
Your existing mortgage and any liens are paid off at closing. Property taxes and HOA dues are prorated to the date of closing, so you pay your share up to that day. Any agreed repairs or credits to the buyer reduce your proceeds.
What to budget as a seller
Including commission, total seller costs often fall in the 6% to 10% range of the sale price in many U.S. markets. Exact totals vary by commission, transfer taxes, and credits.
- Example only: On a $1,500,000 sale, a 6% to 9% range equals roughly $90,000 to $135,000. This may include commission, title and escrow charges, transfer tax, and any negotiated credits.
Local taxes and assessments to verify
Documentary and transfer taxes
Counties and some cities charge documentary or real property transfer taxes at closing. Confirm current rates and who customarily pays with the Santa Clara County Clerk-Recorder and the City of Santa Clara. Your escrow officer can also itemize these on your preliminary estimate.
Property taxes and special assessments
Under Proposition 13, base property tax rates apply, but many Santa Clara parcels include added charges like Mello-Roos or Community Facilities District assessments and other parcel taxes. These amounts are prorated at closing and can be significant. Review the most recent property tax bill, the preliminary title report, and ask your title officer to flag any special assessments.
HOA, utilities, and permits
Condominiums and planned communities may charge HOA transfer or estoppel fees. Local utility providers may have connection or transfer fees when services change hands. Escrow will coordinate final bills and prorations, but you should ask for the fee schedule early.
Timeline and key documents
- Loan Estimate: Your lender provides this within 3 business days of your application. Review it for loan-related fees and services you can shop.
- Closing Disclosure: For most mortgages, you receive this at least 3 business days before consummation. Compare it to your Loan Estimate and ask questions.
- Escrow period: Typical timelines are 2 to 4 weeks, longer if contingencies or repairs are involved. Escrow coordinates title work, payoffs, prorations, and final signing.
Documents to gather early:
- Purchase contract and contingencies (buyers) or listing agreement (sellers)
- Current deed, mortgage statements, and payoff contact info
- Most recent property tax bill and any assessment notices
- HOA contact details and governing documents, if applicable
- Identification and bank information for funds or proceeds
Negotiation levers that can save you money
- Who pays the owner’s title policy: This is a common negotiation point in California and can vary by city and contract.
- Seller credits to buyer: Credits can help cover buyer closing costs or a rate buydown, subject to lender limits.
- Repairs versus credits: Credits can simplify timing, while repairs may be preferred for move-in readiness. Decide what fits your timeline.
- Commission: For sellers, commission is negotiable and has a large impact on net proceeds.
Smart budgeting steps
- Get written estimates: Ask your escrow officer for an itemized estimate for both sides of the transaction. Request a title premium quote and any city or county transfer taxes.
- Clarify prepaids: Ask your lender to explain your escrow deposits for property taxes and insurance and when they will be collected.
- Confirm HOA fees: Contact the HOA for an estoppel letter and the full list of transfer or move-in charges.
- Read the preliminary title report: Identify liens, easements, and special assessments early to avoid delays.
Tax and legal flags to know
Some items can affect your taxes even if they are not direct closing costs. The federal home sale exclusion may exclude a portion of gain if you meet eligibility rules. California taxes capital gains as ordinary income. Nonresident sellers can be subject to state withholding unless an exemption applies. Speak with your tax advisor and review IRS Publication 523 and California Franchise Tax Board guidance for details.
Work with a local pro
In a market like Santa Clara, small percentage changes can mean big dollars. An experienced local broker can coordinate escrow, lenders, title, HOA documents, and timelines so you know where every dollar is going. If you want clear estimates, negotiation strategy, and bilingual support, reach out to Peralta Properties to get started.
FAQs
What are closing costs in Santa Clara?
- Closing costs are the one-time fees, prepaids, prorations, taxes, and transaction charges due at closing, separate from the purchase price and down payment.
How much do buyers typically pay in closing costs?
- Buyers often budget 2% to 5% of the purchase price when financing, but totals vary based on loan terms, prepaids, inspections, and title and escrow charges.
What are the main seller closing costs?
- The largest seller cost is usually the commission, plus transfer taxes if applicable, title and escrow fees, prorated taxes and HOA dues, repairs, and any agreed credits.
Who pays the owner’s title insurance policy locally?
- Customs can vary by city and escrow company. In many California deals the seller pays, but it is negotiable and should be confirmed in your contract.
Are there city transfer taxes in Santa Clara?
- Transfer taxes depend on county and city rules. Confirm current rates and who pays with the Santa Clara County Clerk-Recorder and the City of Santa Clara, or ask your escrow officer.
What documents should I gather to estimate costs?
- Collect your purchase contract or listing agreement, current mortgage statements, the latest property tax bill, HOA contacts and documents, and identification and bank details.
When will I see final closing numbers?
- Your lender must provide a Closing Disclosure at least 3 business days before consummation for most mortgages. Compare it to your Loan Estimate and ask for any needed clarifications.
