What It Costs to Sell a Home: From Commission to Closing Fees
· Buyer / Seller Tactics
A plain-English list of every cost a Southern California home seller pays, with a worked example of what you actually take home.
If you have never sold a home in the U.S., the first surprise is that the sale price is not what lands in your bank account. Several costs come out of the sale at closing, and most are paid through escrow, a neutral third party that holds the money and documents until everything is complete. Knowing the list before you price the home lets you set a realistic net number. This note walks through each item in plain terms.
The largest cost is usually real estate commission. In California it is not set by law and is negotiable. Typically the seller's agreement states what is paid to the listing agent and what is offered to the buyer's agent, and since the rule changes of recent years, buyers now sign their own agreement with their agent, so how the buyer-side amount is handled is something to discuss openly before you list. Ask every agent to put the full commission structure in writing, and confirm the details for your own case.
Next come government and title-related charges. Counties charge a documentary transfer tax when ownership changes, and some cities add their own on top, so the amount depends on where the home sits. Escrow fees and title insurance for the buyer's lender are split by local custom, and in Southern California the seller commonly pays for the owner's title policy, though this can be negotiated. You will also pay for recording and courier items, and if the home is in an HOA, for the documents the association must provide to the buyer.
Then there are costs tied to your own loan and property. Your existing mortgage must be paid off from the proceeds, plus any interest owed up to the closing day. Property tax is prorated, meaning you pay for the days you owned the home in the tax period, and the buyer pays after that. California's Prop 13 base rate is 1% of assessed value, with an effective rate commonly around 1.1-1.25%, so the prorated amount depends on your bill. Prepayment penalties are uncommon on typical home loans, but read your loan documents to confirm.
Preparation and negotiation costs are the ones people forget. Many sellers pay for cleaning, staging, minor repairs and a pre-sale inspection. After the buyer's inspection, the buyer may ask for repair credits, and you will decide what to accept. A home warranty is sometimes offered to attract buyers. None of these is mandatory, but they often affect how smoothly the sale goes.
Suppose you sell a home for $1,000,000. A total commission of 5% is $50,000 (5% x $1,000,000). A transfer tax of $1.10 per $1,000 is $1,100 (1,000 x $1.10). Say escrow, title and recording come to $4,000, and you give $10,000 in repair credits. Total costs are $65,100 ($50,000 + $1,100 + $4,000 + $10,000), leaving $934,900. If you still owe $500,000 on your mortgage, you take home about $434,900 before income tax. Your actual numbers will differ, so ask for a written net sheet.
Foreign sellers face one more item. When a foreign person sells U.S. real estate, FIRPTA withholding is commonly 15% of the gross sale price, taken from the seller's proceeds at closing. For example, on a $1,000,000 sale that is $150,000 held back (15% x $1,000,000). It is a withholding, not necessarily your final tax, and in some cases you can apply to reduce it, so talk to a tax professional before listing. It is never a cost to a buyer. California may also require its own withholding in certain situations.
Here is the current backdrop. In our MLS feed on 2026-11-14 there were 5889 active listings, with an overall median list price of $910,000 and a median of 27 days on market. For context, the California Association of REALTORS® (C.A.R.) reported a statewide median price of $901,420 for an existing single-family home in September 2026. These are broad figures, and your own home's price and timing depend on its location, condition and presentation. Escrow typically runs about 30-45 days with financing and roughly 14-21 days for cash, so plan your move and your next purchase around that.
Before you list, ask for a net sheet that shows each cost above using your own price and loan balance. If you plan to buy again, ask Treasure Mortgage for a personalised quote, since rates depend on your credit, loan size, down payment and property type. Shirley can walk you through the numbers in English or Chinese, with no obligation. Message Shirley when you are ready.
Source: California Association of REALTORS® (C.A.R.), California & County Sales & Price Report, September 2026: https://www.car.org/marketdata/data/countysalesactivity
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