Orange County home selling costs, explained

1. Listing-side fee

The fee paid to your listing agent. With this service it is a proposed 1% of the sale price. See how the 1% listing fee works.

2. Buyer-agent compensation (optional and negotiable)

Compensation for the buyer’s agent is separate from the listing fee. You may choose to offer it, a buyer may request it in their offer, or it may not apply. It is negotiable in every case (see NAR, “The Facts”).

3. Documentary transfer tax

California counties may charge a documentary transfer tax of $1.10 per $1,000 of value transferred (California Revenue and Taxation Code §11911), and Orange County applies this rate (source: Orange County Clerk-Recorder). Who pays is negotiable; in Orange County it is customarily the seller. Confirm with escrow whether any additional city tax applies to your property.

4. Escrow and title

Escrow fees and the owner’s title insurance policy are often split or allocated by custom and by what the purchase contract says. Fees vary by company and sale price, so ask for written quotes rather than relying on a rule of thumb.

5. Prorations, payoffs, and HOA items

• Your mortgage and any other liens are paid off from the proceeds.
• Property taxes are prorated between buyer and seller as of closing.
• If you’re in an HOA, expect document and transfer fees; who pays which items is set by the contract and the association.

6. Repairs, credits, and preparation

Pre-listing work, repairs requested after inspections, and credits to the buyer are all possible costs. Many are optional; see preparing your home for sale.

7. Taxes on gain

If the home was your main residence for at least two of the last five years, you may be able to exclude up to $250,000 of gain ($500,000 for most married couples filing jointly) under IRS rules (source: IRS Publication 523). Talk to a tax professional about your situation.

Worked example

Common questions

Which selling costs are negotiable?

Agent fees, buyer-agent compensation, repair credits, and the allocation of many escrow and title costs are all negotiable. Taxes and loan payoffs are not.

Can you give me an exact net-proceeds figure?

Only escrow can produce final figures. Joshua can walk through an estimate with you using your actual payoff and quotes once you’re preparing to list.