Before you list, it helps to know the cost to sell a house in California so you can estimate what you will actually walk away with. Costs vary by price, property and negotiation, but these are the main items.
1. Agent compensation
Commissions are negotiable and set in a written listing agreement. Since recent industry rule changes, buyer-agent compensation is discussed and agreed upon openly rather than assumed. Ask your agent to explain exactly what you will pay and what you get for it.
2. Transfer taxes
California counties charge a documentary transfer tax on sales, and some cities add their own. Certain high-value sales in the City of Los Angeles may also be subject to additional measures, so confirm what applies to your property address.
3. Escrow and title
Escrow fees and title insurance are paid at closing. Who pays which share varies by custom and negotiation, so check your offer and local practice.
4. Repairs and preparation
Fixing maintenance items, deep cleaning, painting, landscaping and sometimes a pre-listing inspection can improve your price and avoid renegotiation. Ask your agent which projects are worth the money before you spend.
5. Staging and marketing
Professional photos are essential, and staging can help vacant or dated homes. Some agents include marketing costs in their service; others charge separately.
6. Mortgage payoff and prorated costs
Your loan balance is paid from the proceeds, along with any prorated property taxes, HOA dues and utilities through the closing date.
7. Possible seller credits
Buyers may ask for repair credits or closing-cost help after inspections or in a slower market.
8. Taxes on your gain
If you lived in the home as your primary residence for at least two of the last five years, you may exclude up to $250,000 of gain ($500,000 for married couples filing jointly) from federal tax. Gains above that, investment properties and other situations are treated differently, so talk with a CPA.
Estimate your net
- Start with the likely sale price.
- Subtract mortgage payoff.
- Subtract commission, transfer tax, escrow, title and prep costs.
- Set aside money for taxes if there is a large gain.
Ask your agent for a written net sheet estimate before you list. For the pricing side, read how to price a house in Culver City.
Frequently asked questions
Are real estate commissions negotiable in California?
Yes. Commissions are negotiated between you and your agent and spelled out in the listing agreement.
Who pays closing costs when selling?
Sellers commonly pay transfer taxes, their share of escrow and title, and loan payoff. Details vary by contract.
Do I pay capital gains when I sell my home?
Possibly. Many owners qualify for an exclusion on primary residences, but gains above the limit and investment properties are taxable.
Get a written net-proceeds estimate and free home valuation from a local agent.
This article is general information, not a loan commitment, legal or tax advice. Programs, rates and rules change, so confirm current details with a licensed professional before you decide.
Written by the Terranova Real Estate Group team · DRE 01785581 · NMLS 1091484 · Meet Griselda Espinoza