Buying a home in Los Angeles means planning for more than your down payment. Closing costs can surprise even seasoned buyers if you do not know what is customary in LA County. You want clear numbers, straightforward guidance, and a plan to keep cash to close manageable. In this guide, you will learn what you will likely pay, who usually pays what in LA, and smart ways to estimate and reduce your costs. Let’s dive in.
What closing costs cover in Los Angeles
Loan related fees
Your lender will disclose these early. Common items include origination or application fees, underwriting, and any discount points you choose to buy to lower your rate. You will also see third party costs like the appraisal, credit report, flood determination, and any initial escrow deposits required by your lender.
If you are using a mortgage, you will also pay for the lender’s title insurance policy. This protects the lender’s interest in the property and is priced based on your loan amount.
Escrow and title services
The escrow company is a neutral third party that manages funds and documents. Escrow fees compensate that service. Title services include the title search and insurance. In many Southern California transactions, the seller pays for the owner’s title policy while the buyer pays for the lender’s title policy, but this is negotiable in your contract.
Recording charges for the deed and loan documents are also part of closing. These are typically a few hundred dollars and are commonly paid by the buyer in LA.
Prepaid items and impounds
Prepaids are not fees, but they add to cash to close. Expect to prepay the first year of homeowners insurance. Your lender may also collect several months of property taxes and insurance into an escrow account, plus any mortgage interest from funding day to month end.
If your home is in an HOA, you may prepay the first month’s dues and possibly reserve or transfer fees. Specific HOA move in fees vary by building and management company.
Inspections and reports
Most LA buyers order a general home inspection. Pest or termite inspections are very common in Southern California. You might also choose specialized inspections, like foundation or geological, depending on the property. Natural Hazard Disclosure reports are standard in California and are often ordered early in escrow. Who pays for specific reports can be negotiated.
Taxes and transfer charges
Property taxes are prorated at closing so each party pays their share for the period they own the home. Some cities in Los Angeles County also impose local transfer taxes. In many LA area deals, the seller pays documentary transfer taxes while the buyer pays recording fees, but city rules differ and contract negotiations control the final outcome.
Who usually pays what in LA
Title insurance
It is common in Southern California for the seller to pay the owner’s title insurance policy, while you, the buyer, pay the lender’s title policy if you have a loan. This is a custom, not a rule, and can be negotiated in your offer.
Escrow fees
Escrow fees are often split 50 and 50 between buyer and seller. The split is negotiable and may vary by deal.
Recording and transfer taxes
Buyers typically pay recording fees for the deed and loan documents. Sellers often pay documentary transfer taxes and any city transfer taxes where applicable. Some LA County cities have their own transfer tax amounts and practices, so confirm the city’s rules for your property.
Inspections and HOA items
Buyers usually pay for inspections such as home and pest. HOA transfer or estoppel fees are often a seller expense, while buyers commonly prepay the first month of HOA dues. These items are also negotiable.
Negotiable concessions
Seller concessions can reduce your cash to close. The amount a seller can contribute depends on your loan type and program limits. Conventional, FHA, and VA loans each have maximum concession percentages, so align your ask with your financing.
How much you will likely pay
A practical rule of thumb for California buyers is 2% to 5% of the purchase price in closing costs, not including your down payment. Where you land in that range depends on your loan program, whether you pay points, and how large your initial escrow deposits are.
Common cost ranges
- Lender fees and points: 0% to 2% of the loan amount
- Appraisal: about $500 to $1,200
- Escrow fees: roughly $1,000 to $3,000 or more, depending on price
- Lender’s title policy: a few hundred to a few thousand dollars, based on loan amount
- Recording and similar charges: a few hundred dollars in many transactions
- Prepaids and impounds: often $1,000 to $6,000 or more depending on taxes, insurance, and lender policy
- Inspections: home inspection about $300 to $800; pest inspection about $75 to $300; specialized inspections vary
Examples by price point
- $600,000 purchase: buyer closing costs around $12,000 to $30,000
- $900,000 purchase: buyer closing costs around $18,000 to $45,000
- $1,500,000 purchase: buyer closing costs around $30,000 to $75,000
You will trend higher if you buy discount points or if your lender requires larger tax and insurance reserves. You will trend lower if you negotiate seller concessions or receive lender credits.
Estimate your cash to close
Use the Loan Estimate
After you apply for a loan, your lender issues a Loan Estimate within three business days. It shows projected monthly payments and itemized closing costs. Ask two or three lenders for detailed estimates so you can compare lender fees, points, appraisal costs, title, and escrow.
Confirm with the Closing Disclosure
At least three days before closing, you will receive a Closing Disclosure. This shows your final cash to close, including your down payment, closing costs, and any credits. Review it early, confirm wire instructions directly with escrow by phone using known contact information, and flag any questions right away.
Plan your liquidity
Most LA escrows run 30 to 45 days, though complex deals can take longer. Keep funds for your down payment and closing costs accessible, and be ready to provide proof of funds to escrow. If you are moving money from different accounts, plan transfers well ahead to avoid delays.
Ways to reduce your costs
Shop lenders
Compare lender fees, not just the rate. Ask each lender to quote the same rate and points structure so you can compare apples to apples. Clarify whether appraisal, credit report, and other third party charges are pass through or marked up.
Use credits or concessions
- Request seller concessions to cover specific closing costs, within your loan program’s limits.
- Consider lender credits. You may accept a slightly higher rate in exchange for a credit toward closing costs if that better fits your short term goals.
- Target line items that are customary to negotiate in LA, such as aspects of title and escrow splits or HOA transfer fees.
Structure your points
If you want a lower payment, you can buy discount points. You can also negotiate for the seller to pay points or ask the lender if points can be financed. Align this choice with your time horizon in the home and overall rate outlook.
Buyer checklist for LA closings
- Get multiple Loan Estimates and compare total cash to close, not just rates.
- Ask your agent how city transfer taxes and local customs may affect your specific property.
- Scope inspections early and budget for home and pest at minimum.
- Confirm whether your loan will require impounds for taxes and insurance and how many months will be collected.
- Review your Closing Disclosure as soon as it is issued and verify wire instructions directly with escrow by phone.
- Keep a small cushion for last minute adjustments, like prorations or HOA fees.
When to negotiate in LA
Timing matters. If the market or the property has been sitting, sellers may be more open to covering closing costs or specific fees. You can also target concessions after inspections, when you have clear findings to discuss. For competitive listings, focus on smaller, typical LA items rather than large concession asks that could weaken your offer.
Final thoughts
Closing costs in Los Angeles are predictable once you know the categories, local customs, and your loan’s rules. Aim for a detailed estimate early, then refine it as you shop lenders and negotiate. With a clear plan, you can protect your budget and keep your home purchase on track.
If you want a tailored closing cost worksheet for a specific LA home and loan scenario, connect with Country Queen Real Estate. Our team brings decades of local transaction experience to help you plan with confidence and close smoothly.
FAQs
What are typical buyer closing costs in Los Angeles?
- Many LA buyers pay about 2% to 5% of the purchase price in closing costs, excluding the down payment, depending on loan terms, points, and prepaids.
Who usually pays title and escrow in LA?
- Sellers commonly pay the owner’s title policy, buyers pay the lender’s title policy, and escrow fees are often split, though every item is negotiable in the contract.
Do LA buyers pay transfer taxes?
- Buyers typically pay recording fees, while sellers often pay documentary and local city transfer taxes, but specific city rules and negotiations can change this.
How do lender impounds for taxes work?
- Lenders often collect 2 to 6 months of property taxes and insurance up front to fund your escrow account, which increases cash to close but spreads future bills over monthly payments.
What is the difference between closing costs and cash to close?
- Closing costs are the fees and prepaids due at settlement, while cash to close equals your down payment plus closing costs minus any seller or lender credits.
Can I ask the seller to pay my closing costs?
- Yes, within loan program limits for concessions and market conditions; stronger markets may limit what sellers are willing to cover, so tailor the ask to the deal.
