Are closing costs in San Diego catching you by surprise? You are not alone. Between lender fees, title and escrow, and prepaid taxes and insurance, the numbers can feel overwhelming. The good news is you can plan ahead, estimate a realistic range, and use simple strategies to keep more cash in your pocket. This guide explains what you will pay, when you will see the numbers, how San Diego practices affect your bottom line, and ways to reduce costs. Let’s dive in.
What closing costs cover
Closing costs are the one-time expenses you pay to finalize your home purchase. They include lender charges, title and escrow services, government and recording fees, inspections, and prepaid items like property taxes and homeowners insurance. Most costs are due at closing through escrow.
You will first see an itemized estimate on your Loan Estimate after you apply for a mortgage. Before you sign final paperwork, you will get a Closing Disclosure that shows the actual numbers. Both documents help you prepare and compare.
When you learn your numbers
Under federal rules, your lender must provide a Loan Estimate within 3 business days of your application. This early estimate shows projected closing costs and monthly payments so you can shop and plan. At least 3 business days before closing, you will receive a Closing Disclosure with final figures.
Use these documents to confirm fees, ask questions, and fix errors early. Compare line by line so there are no surprises on closing day.
Typical buyer costs in San Diego
San Diego buyers commonly see the following items on estimates and Closing Disclosures. Exact amounts vary by price, property type, loan program, and timing.
Loan-related costs
- Origination, underwriting, processing: Lender charges to evaluate and create your loan. Some lenders quote no-origination structures, but fees can appear elsewhere, so compare carefully.
- Discount points: Optional prepaid interest that reduces your rate. One point equals 1% of the loan amount. Run the break-even math to see if points make sense for how long you plan to own the home.
- Credit report: A small charge for your credit pull.
- Appraisal: The lender’s valuation of the property. Cost depends on property size and complexity.
- Flood certification: Verifies whether the home is in a flood zone.
- Rate-lock fee: If charged, it secures your interest rate for a set period.
Title and escrow fees
- Title insurance: A one-time premium that protects against title defects. Lenders require a lender’s policy. An owner’s policy is optional for buyers but commonly purchased because it protects your equity.
- Escrow fee: Paid to the escrow company that handles funds and documents. In Southern California, this fee is often split between buyer and seller by local custom, but it is negotiable.
- Recording fees: County charges to record the deed and your mortgage in public records.
Government and transfer fees
- Documentary transfer tax: Counties and some cities charge a tax when property changes hands. Rates and who pays vary by jurisdiction. Confirm current rules with the county or city before you make an offer.
- Other county document fees: Additional county charges may appear, usually modest in amount.
Inspections and property-related fees
- Home inspection: A general inspection to evaluate the property’s condition.
- Pest and wood-destroying organism inspection: Common in California. Lenders often require clearance for certain loans.
- Specialty inspections: Roof, sewer, septic, or other inspections if needed.
- Disclosures and reports: California requires hazard and environmental disclosures. Sellers provide mandated disclosures, while buyers may pay for supplemental reports required by a lender or escrow.
Prepaid items and impounds
- Homeowners insurance: Lenders usually collect the first year’s premium at closing.
- Property taxes: In California, property taxes are assessed under Proposition 13. Plan for roughly 1% of assessed value plus locally approved assessments, with exact rates varying by neighborhood. Taxes are prorated at closing.
- Prepaid mortgage interest: Covers interest from funding through the end of the month.
- Initial escrow/impound deposit: Lenders often collect a few months of taxes and insurance to set up your escrow account.
HOA and condo items
- HOA document package: If the property has an HOA, expect fees for required documents. Buyers typically pay for the package.
- Dues and reserves: Prorated dues or initial reserve contributions if required.
Optional protections and other fees
- Home warranty: An optional one-year policy that covers certain systems and appliances.
- Wire and notary fees: Escrow or title companies may charge for secure wires or mobile notary services.
How much to budget
A common planning rule is 2% to 5% of the purchase price for buyer closing costs when you use a mortgage. Cash buyers typically pay less because they skip loan-related charges.
- Quick example: On an $800,000 San Diego home, 2% to 5% equals about $16,000 to $40,000. Your actual number will depend on your loan type, discount points, title choices, the timing of your tax and insurance impounds, and HOA requirements.
- Use this range to plan conservatively, then lock in specifics with your lender, escrow, and title company.
Who usually pays what in San Diego
Local custom often guides who pays which fees, but terms are always negotiable. In many California markets, sellers commonly pay for the owner’s title policy and some seller-side escrow items. Buyers typically pay for lender charges, appraisal, inspections, prepaid taxes and insurance, and the lender’s title policy.
Market conditions matter. In a competitive area or price point, sellers may be less inclined to offer credits. In a slower segment, you may be able to negotiate seller-paid closing costs or a credit at closing.
Strategies to reduce upfront costs
- Shop lenders and compare Loan Estimates: Request quotes from multiple lenders. Look closely at origination, underwriting, points, and third-party fees.
- Ask for seller credits: You can negotiate a credit toward your closing costs. Just know that your loan program sets limits on allowable seller concessions.
- Use lender credits: Many lenders offer credits in exchange for a slightly higher interest rate. Compare the long-term cost to decide what fits your budget.
- Finance certain costs: Some fees can be rolled into the loan amount, or you can choose a rate with lower upfront costs.
- Tap assistance programs: Explore down payment and closing-cost help through city and county agencies, as well as state programs such as CalHFA. Eligibility depends on income, price limits, and other criteria.
- Ask about title and escrow discounts: Bundled services or returning-customer discounts may be available. It never hurts to ask.
Property taxes and impounds in San Diego
California’s Proposition 13 sets a base property tax rate of about 1% of assessed value, plus voter-approved assessments that vary by area. Your assessed value is generally based on your purchase price at transfer. After closing, you may receive supplemental tax assessments related to the change in ownership.
Most lenders require an escrow account for taxes and insurance. At closing you will prepay a prorated share of taxes and several months of reserves. This makes your monthly mortgage payment include a portion set aside for these bills so they are paid on time.
Simple estimate checklist
Use this quick process to build a personalized estimate and reduce surprises.
- Get 2–3 Loan Estimates.
- Compare origination, points, underwriting, and lender credits.
- Note any rate-lock fees and how long the lock lasts.
- Confirm title and escrow quotes.
- Ask who pays the owner’s policy and how escrow fees are split in your offer.
- Request a fee sheet from the title and escrow companies.
- Add inspection and optional items.
- Budget for a home inspection, pest inspection, and any specialty inspections your agent recommends.
- Decide whether you want an owner’s title policy and a home warranty.
- Estimate prepaids and impounds.
- Confirm expected homeowners insurance premium and how many months of reserves the lender will collect.
- Estimate prorated property taxes and prepaid interest based on your target closing date.
- Compare to the 2–5% rule.
- Multiply your purchase price by 0.02 and 0.05 to set a realistic range.
- Make adjustments as you finalize quotes and credits.
Closing timeline and fraud safety
- Track your disclosures: Expect your Loan Estimate within 3 business days of application and your Closing Disclosure at least 3 business days before closing. Review both documents carefully.
- Match LE to CD: Compare line items, interest rate, credits, and cash to close. Ask for explanations on any changes.
- Verify wiring instructions: Always confirm wire details by calling your escrow or title company at a known, trusted phone number. Do not rely on emailed instructions alone.
- Bring funds safely: Confirm whether your escrow accepts a cashier’s check or requires a wire. Follow their security steps.
- Keep records: Save signed copies of your Closing Disclosure, note, deed of trust, and your title policy for future reference.
Local resources to verify numbers
- San Diego County Assessor, Recorder, and Treasurer-Tax Collector for recording fees, transfer tax practices, and property tax questions.
- City of San Diego finance or clerk’s office for any city-specific transfer charges.
- California Association of Realtors for local practice guidance and standard forms used in San Diego transactions.
- Consumer Financial Protection Bureau for clear explanations of the Loan Estimate and Closing Disclosure.
- San Diego Housing Commission, county housing agencies, and CalHFA for first-time buyer and closing-cost assistance programs.
- Your lender, escrow officer, and title company for fee sheets and final numbers.
Work with a San Diego‑savvy team
Understanding closing costs is the first step to buying with confidence. Your next step is to tailor these estimates to your price point, loan type, and timing so you know exactly what to bring on closing day. When you work with a local, hands-on team, you get clear answers, smart negotiation, and steady guidance from offer to keys in hand.
If you are planning a move in San Diego County, let’s talk through your numbers and strategy. Connect with Sold By Janet for a friendly, no-pressure consult. Hablamos español.
FAQs
How much are closing costs for San Diego buyers?
- Plan for about 2% to 5% of the purchase price when you use a mortgage. Get a Loan Estimate from your lender for a transaction-specific figure.
When will I know my exact closing costs?
- You receive a Loan Estimate within 3 business days of applying and a final Closing Disclosure at least 3 business days before closing.
Who usually pays title and escrow in San Diego?
- Local custom often has sellers paying the owner’s title policy and buyers paying lender-related fees and inspections. All items are negotiable in your offer.
What are prepaids and impounds on a mortgage?
- Prepaids are upfront amounts for insurance and interest, while impounds are reserves your lender collects for future property tax and insurance payments.
How are California property taxes handled at closing?
- Taxes are prorated based on your closing date. Under Proposition 13 the base rate is about 1% of assessed value plus local assessments that vary by area.
Can I ask the seller to cover some of my costs?
- Yes. You can request seller credits, subject to loan-program limits and market conditions. Your lender can confirm the maximum allowable credit.
What inspections do San Diego buyers usually order?
- Most buyers get a general home inspection and a pest inspection, plus specialty inspections such as roof or sewer scope if recommended by your agent.
How can I reduce my cash to close?
- Compare lenders, request seller credits, consider lender credits, and explore down payment or closing-cost assistance through local and state programs.
