Redondo Beach Closing Costs: How Much Money Do I Need?

I work with many first time home buyers in Redondo Beach CA and somewhere along the way, usually as we are getting ready to make an offer I get the closing costs question. It is not easily answered because there are a lot of moving parts as you will see below. As a ballpark guess it can be 1-2% although I have seen final settlement statements for buyers both higher and lower.

It's really a very good idea to cover this topic sooner rather than later because some homebuyers are shocked when they discover that buying a home is much more than purchase price and down payment. In plain English that means that in addition to your downpayment of 20% (or however much you are putting down) there are additional fees and expenses that you have to pay at closing before you get the keys.

While a buyer doesn't pay sales tax per se (you do pay property tax) on a single-family residence or condo as on other things we buy including cars etc, a buyer does incur additional fees to get the loan and for processing the paperwork to buy a home. 

Here's a general breakdown of recurring and non-recurring fees. Comments below are relative to LA County in general. Don't worry if you don't understand everything below because I can explain everything in detail if need be. Please note that in Southern CA we usually use escrow companies while in Northern CA it is more common for the Title Co to also be the escrow holder.

Non-Recurring Closing Costs. Fees that are paid one time only as an expense of closing a transaction.

Title Policy: Sellers typically will pay for the buyer title insurance but the buyer pays for the lender insurance.

Escrow  Fees: Escrow companies charge $$2-3 per thousand as a line item. Some also charge a base fee.
Appraisal: Typically the lender will charge the buyer's credit card for an appraisal. Often this appears on a closing statement as "POC" meaning paid outside of closing.

Credit Report: lenders may charge around $35 or nothing.

Notary: if you need a mobile notary at closing that can run $150 or more but if it is a regular notarization less than $50.
Wire Fees: you will be wiring your EMD and final payment. Fees vary depending on your bank. Please note that you have to initiate the bank wire from the branch and not ACH or online banking.

Courier and Delivery: varies depending on the situation.

Attorney Fees: hopefully none!



Transfer Taxes: unless it is Redondo Beach where the City Transfer Tax is split 50/50 ($2.20 per thousand) seller will most likely pay.

Home Protection Plan: Seller usually pays but if not around $500.

Natural Hazard Disclosure: Seller usually pays but if not $80-120.

Home Inspections: Depending on the size of the home a general inspection is $350-600. Sewer line videos can run $295 and up, termite anywhere from free to $120 and mold can get very expensive depending on the areas that need to be sampled.

Fees paid to the lender in conjunction with the loan: origination, points, etc, Vary from lender to lender. Sometimes you may even get a lender credit!

Recurring Closing Costs: Fees that are paid at closing and will continue to occur after escrow closes.
Fire insurance Premium: Basically home owner's insurance. If a condo you will also need HO6 insurance. You may want to purchase earthquake insurance separately.

Flood insurance: Rarely needed.

Property Taxes: You will owe the property taxes due and payable at the time of closing and then pay as an ongoing basis.

Private Mortgage Insurance Premiums: If you are buying with less than 20% down and not getting a second mortgage or HELOC you will pay PMI.

Mortgage: Prepaid interest is collected at close and you keep paying your mortgage until the loan is paid off.