Buying a home in San Mateo County, CA involves additional costs on top of the property’s purchase price. These are called closing costs, which include fees, charges, and taxes that are due at the settlement of a real estate transaction.
In terms of who pays closing costs in California, both the buyer and the seller are required to pay their respective closing costs. The biggest closing costs fall on the seller, but the buyer also has to cover some expenses.
Sellers in California typically pay about 0.8% of a home’s final sales price in closing costs, while buyers using a conventional loan have to pay a 1% loan origination fee along with other expenses, such as appraisal fees, home inspection fees, and title insurance.
In this article, we will zero in on San Mateo County closing costs.
San Mateo County Closing Costs Estimation
In general, as a rule of thumb, San Mateo closing costs amount to approximately 11% of the total sales price of a home. Given the average home sale price in San Mateo County of $1.52 million, the closing costs would amount to roughly $167,200.
This is no surprise as the San Mateo County cost of living is also a bit high. In fact, the cost of living in San Mateo County is 71.2% higher than the national average, with home costs 255% higher than the national average.
The Typical San Mateo County Closing Costs
The standard closing costs California home sellers, particularly those in San Mateo County, are responsible for include county transfer tax and half the city taxes. On the other hand, homebuyers pay for the recording fee, escrow, title, and the other half of the city taxes.
Breakdown of Closing Costs
Closing costs vary depending on the city, county, or state where the home you’re buying or selling is located. The San Mateo County customary closing costs for both buyers and sellers are enumerated below:
In general, the closing costs for buyers amount to 1% to 1.5% of the home purchase price, including any commission.
The closing costs for sellers are usually 6% to 10% of the sale price of the San Mateo County property. Sellers typically pay more than buyers because it is the seller that pays for most if not all of the commission of the listing agent and the buyer’s agent.
Here’s a list of the standard closing costs for buyers and sellers in San Mateo County:
|Closing Costs for Buyers||Closing Costs for Sellers|
|A loan amount origination fee||Agents’ commissions|
|Escrow fees||Transfer taxes or recording fees|
|Title insurance||Loan payoff costs|
|Home inspections||Title insurance|
|Home appraisal fee||Escrow and closing fees|
|Taxes on the money you've borrowed for your home loan||Prorated San Mateo County property tax|
|Private mortgage insurance (with a down payment less than 20% of the purchase price)||Credits toward closing costs|
|Discount points, or mortgage points (fees paid right to the mortgage lender in exchange for a lower interest rate)||Attorney fees|
|Document recording fees for the deed and mortgage|
Tips for a First-Time Home Buyer Tax Credit
When it comes to federal taxes, there is no tax credit designed specifically for first-time home buyers. The First-Time Home Buyer Tax Credit no longer exists; it ended in 2010. There has been a recently introduced bill, dubbed the First-Time Home buyer Act of 2021. This piece of legislation has not yet been passed into a law and its future is uncertain.
One way you can lessen the costs of buying a house in San Mateo County is to check with your state or local government for any tax benefits that you may be eligible to receive.
First-Time Home Buyer Programs are offered at a state level to help make buying a house more affordable. Although these may not offer tax benefits, homeowners are usually provided grants, loans, and/or financial assistance for closing costs or down payments.
The Mortgage Interest Credit is a federal tax credit available to homeowners who were issued a Mortgage Credit Certificate (MCC) from their local government. This aims to help first-time home buyers with lower incomes afford home ownership.
The Residential Energy Efficient Property Credit is a non-refundable tax credit that assists in paying for qualified energy-efficient equipment, such as solar hot water heaters, geothermal heat pumps, small wind energy turbines, and solar electric equipment.
First-Time Home Buyer Savings Accounts are state-authorized accounts that allow individuals to contribute to a savings account designated for purchasing a house. Annual contributions are deductible on state returns, similar to an IRA deduction.
Frequently Asked Questions
Closing costs are the fees and expenses that buyers and sellers usually incur to complete a real estate transaction. This is on top of the property’s selling price.
Customary closing costs (San Mateo County) for buyers amount to 1% to 1.5% of the home purchase price, including any commission. The closing costs for sellers are usually around 6% to 10% of the sale price of the San Mateo County property.
The standard closing costs (San Mateo County) for home sellers include county transfer tax and half the city taxes; while buyers pay for the recording fee, escrow, title, and the other half of the city taxes.
Your lender is required by law to provide you with a loan estimate that outlines your estimated closing costs along with other loan details.
Many buyers can avoid certain closing costs by getting the seller to shoulder them instead. This arrangement is known as seller concessions. Typically, the payment comes out of the proceeds of the sale.
There are online closing cost calculators you can use for free. These will give you a rough estimate of your closing costs.
Both the buyer and the seller pay specific closing costs. In some instances, the seller may agree to pay for some or all of the buyer’s closing costs, depending on their agreement.
Sellers typically pay for the county transfer tax and half the city taxes.
Buyers usually pay for the recording fee, escrow, title, and half of the city taxes.
In the state of California, closing costs generally amount to around 11% of the total sales price of a home.
While there may be tons of online resources that may help you understand what closing costs are and provide you with an estimate of how much you’ll have to pay on top of your home purchase price, a real estate professional is your one true ally in determining how to have the best deal out of your home purchase transaction.
I have been helping clients successfully buy and sell residential properties on the Peninsula since 1984. I am a second-generation San Mateo Realtor®, and I grew up and raised my own family here, so I am very familiar with the market.
Let me help you buy your dream home. Contact me today.