A Guide to San Francisco Closing Costs

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Closing costs in San Francisco and across the US are inevitable home-buying and home-selling expenses. These costs are the biggest upfront expense for buyers after the down payment, and sellers pay the bulk of the agent commissions.

It’s important, then, whether you’re a buyer or a seller to understand what costs you’ll be facing when you get to the closing table.

Read on so that you won’t be taken by surprise at closing and can prepare accordingly for San Francisco closing costs.

Cost of Closing Overview

First, let’s take a look at the typical closing costs in San Francisco and everywhere else?

Generally speaking, “[c]losing costs are the thousands of dollars in fees associated with a mortgage, typically amounting to 2 percent to 5 percent of the loan principal. There are various closing cost components and they vary from state to state. Some closing-related items can be negotiated by the borrower.”

So the exact amount you’ll have to pay varies and is determined by several factors. But to help you know what to expect, “[t]he average total for closing costs on single-family homes in the U.S. in 2019 was $5,749, including taxes.”

Closing expenses typically fall into two broad categories: 1) property-related fees and 2) mortgage-related fees.

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These “cover expenses your lender incurs in evaluating the property you’re financing” and include . . .

  • Appraisal fee
  • Inspection fee
  • Title search
  • Title insurance


These fees “cover the cost of processing your application” and include . . .

  • Credit report fee
  • Origination fee
  • Application fee
  • Underwriting fee
  • Local fees
  • Legal fees

Buyer Costs

The largest portion of the costs of closing for buyers are those having to do with the mortgage. They are . . .

  • Title insurance – Protects the buyer in case liens or clouds are found or placed on the property subsequent to the sale
  • Mortgage preparation – Fees paid to the lender for generating and drafting the mortgage loan
  • Buyer’s consents – Includes things like inspections
  • Homeowners insurance – A certain portion of premiums to be paid at closing
  • Notary fees – Assessed when closing documents are signed somewhere other than an escrow office
  • Government recording fees – For deed and mortgage recording at the appropriate Bureau of Conveyances
  • Escrow and title document preparation fees – Typically split 50/50 by buyer and seller
  • HOA dues – Usually, two months’ worth of prepaid dues

Seller Costs

The costs for sellers typically include . . .

  • Mortgage loan payoff – To be paid off in full at the closing settlement
  • Agent commissions – Usually paid by seller, but buyer often pays too
  • Transfer taxes/recording fees – Imposed by state/local government for transferring title
  • Escrow fees – Paid to the title company for performing the title search and preparing documents
  • Attorney fees – Paid for legal representation at the settlement
  • Survey fees – Typically for single-family dwellings to verify boundaries and determine whether there are encroachments
  • Liens/judgments – Usually in the form of unpaid HOA dues and/or prorated property taxes and included in the settlement fees.

Special Considerations for San Francisco

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Many of the costs involved in closing, for both buyers and sellers, are based on the sale price (as well as timing of the sale to a lesser degree).

For example, the typical agent commission comes in at about 6% of a home’s sale price. And in an expensive real estate market like that in San Francisco, those commissions can amount to a substantial sum.

Consider that a “typical home in San Francisco is worth $1.26 million, which is the record high for the city . . . That’s up 11.6% from a year ago and 2.8% since April.” As you can see, then, if San Francisco closing costs are base on sale price, they can be pretty hefty.

But there’s some good news that offsets this . . .

Currently, in most markets across the country, inventory is low and demand is high. This means that sellers are in the driver’s seat most of the time. But those conditions don’t obtain in the San Francisco market.

“Unlike the rest of the country, Bay Area home buyers are seeing more options on the market compared with last year . . . San Francisco’s housing inventory in May went up 8.7% from April, and 25.6% from this time last year. . . . Inventory in San Francisco has been rising monthly since February, according to the report . . . And inventory in San Francisco has been seeing year-over-year gains since last August, while nationwide inventory in May was down 31% from last year.”

Housing is expensive and closing costs are high, but you do have more options because inventory is higher than elsewhere. Still, homes are selling very fast, so buyers have to act quickly. And that’s why it’s so important to have a good agent in your corner.

Avoiding Some Closing Costs

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The good news is that some San Francisco closing costs can be avoided and others can be negotiated.

Buyers, who pay the mortgage-related costs of closing, can shop lenders to get a better deal. “Shop mortgage lenders to compare these fees, some of which vary by lender . . . Many fees are not set in stone and the lender has some latitude to adjust them, but you’ll need to ask about each one individually . . . If a fee isn’t clear, ask the lender what it covers specifically and if it doesn’t make sense, ask for the fee to be waived.”

Traditionally, most of the fees associated with closing are paid by the buyer and the rest by the seller. But this arrangement isn’t set in stone either. The fees and who pays them can be negotiated.

“Many buyers believe the only fee that sellers ever pay is the broker’s commission, but savvy real estate shoppers can sometimes negotiate some of the other costs into the seller’s corner. It’s not unusual for buyers to persuade sellers to share some expenses that are paid in advance, including tax and insurance escrow deposits, flood and hazard insurance premiums, property taxes and per-diem interest.”

Why an Agent?

An experienced local agent is really a necessity in San Francisco, first, because the real estate market is, as we pointed a bit different than elsewhere. But there’s more to consider . . .

“Many factors go into selling and buying a home, and a qualified real estate agent takes the pain out of what can become an overwhelming process. . . . [T]he arrangement between a person and their real estate agent as something like a courtship . . . [M]any home buyers and sellers move too fast, eventually engaging in a shotgun wedding.”

Further, it’s “a particularly cumbersome process to buy or sell a home in the competitive San Francisco real estate market . . . San Francisco is a different beast . . . The MLS is wacky; some deals are done without ever hitting the market. You really need a hyperlocal agent, someone with their finger on the pulse of what’s taking place in the market in the next couple of months.”

You can find the agent you need at San Francisco Premier Properties – where the emphasis is on helping clients find the best deal possible and making the whole process as pleasant as possible.