Buying or selling a home in San Jose can come with a surprise at the closing table. With Silicon Valley prices, even small percentages turn into big dollar amounts. You deserve a clear picture of what you will pay, what is negotiable, and where you can save. This guide breaks down typical buyer and seller closing costs, how loan type and concessions change the math, and the Santa Clara County factors to watch. Let’s dive in.
What closing costs cover in San Jose
Closing costs are the one-time fees and prepaids required to transfer title and, if applicable, fund a mortgage. You will see lender charges, title and escrow fees, recording fees, transfer taxes, and prorations for items like property taxes and HOA dues. If you are a seller, you will also see agent commissions and any credits or repairs you agree to.
It helps to separate two ideas:
- Closing costs are fees for services like lending, title, and escrow.
- Prepaids are money collected in advance for taxes, insurance, and daily interest.
Some costs are negotiable, some are set by third parties, and some are set by law or local schedule. Your final allocation depends on your contract and loan program.
How much you should budget
- Buyers: plan for about 2% to 5% of the purchase price in out-of-pocket closing costs. This is separate from your down payment.
- Sellers: plan for about 6% to 10% or more of the sale price, once you include commissions, transfer taxes, repairs, and any seller-paid concessions.
Because San Jose prices are high, the dollar impact is significant. For a $1,000,000 purchase, buyer closing costs often land around $20,000 to $50,000. At $1,500,000, plan for roughly $30,000 to $75,000. Sellers at $1,000,000 often see $60,000 to $100,000 in total costs, and $90,000 to $150,000 at $1,500,000.
Buyer closing costs: line-item guide
Lender fees and origination
Expect roughly 0.25% to 1.5% of the loan amount for origination, underwriting, processing, and related items. Lenders sometimes bundle or waive fees for business reasons, so compare Loan Estimates.
Discount points (optional)
If you buy down your rate, points typically run 0% to 2% of the loan amount. You can also request a lender credit that raises your rate slightly to offset upfront costs.
Title and escrow
Combined title and escrow charges generally fall around 0.25% to 1.0% of the purchase price. This includes escrow services, title search, the lender’s title policy, and optionally an owner’s title policy.
Recording and document fees
County recording, notary, and document prep usually total a few hundred dollars. These are small line items compared to other costs.
Prepaid taxes and insurance
Plan for about 0.25% to 1.0% of the price, depending on your closing date and tax cycle. Lenders often collect 1 to 3 months of property tax reserves and one year of homeowners insurance at closing.
HOA-related fees (if applicable)
For condos and many planned communities, expect 150 to 600 dollars or more for HOA transfer or estoppel certificates. These can be negotiated in the contract.
Inspections and reports
Home inspection and any specialized reports typically total 300 to 1,500 dollars or more. Scope depends on property type and condition.
Impound reserve for taxes and insurance
If your lender requires impounds, you will fund reserves for the first 2 to 3 months of payments for taxes and insurance.
Mortgage insurance and program fees
- Conventional loans may include private mortgage insurance if your down payment is below 20 percent. This is often paid monthly, though single-premium options exist.
- FHA loans include an Upfront Mortgage Insurance Premium that is commonly 1.75% of the loan amount. It can be financed into the loan.
Cash buyers avoid lender charges, but still pay title, escrow, recording, and any prepaids.
Seller closing costs: line-item guide
Real estate commissions
The largest seller cost is typically the commission, often 5% to 6% of the sale price and split between the listing and buyer’s broker. The percentage is negotiable and set by your listing agreement.
Transfer taxes and documentary fees
Santa Clara County and the City of San Jose may charge transfer or documentary taxes at recording. Amounts vary by jurisdiction and can be split or negotiated in the contract. Confirm current figures with county and city offices.
Title and escrow fees
Sellers usually pay some title and escrow charges, often 0.1% to 0.5%. In many California transactions, the owner’s title policy is a seller expense, though local custom and negotiation apply.
Repairs, credits, and concessions
Plan for 0% to 2% or more depending on inspection findings and negotiations. Seller-paid concessions can also cover some buyer closing costs if allowed by the buyer’s loan program.
Prorations
Property taxes, HOA dues, and utilities are prorated at closing. You will credit the buyer for any period you have prepaid.
Preparation and staging
Pre-list inspections, touch-up repairs, staging, and maintenance can range 500 dollars to 10,000 dollars or more, depending on the property and strategy.
How loan type and concessions change the math
Conventional loans
Seller concessions are permitted within program limits. A common guideline is up to 3% when the buyer’s down payment is less than 10 percent, with higher caps at larger down payment tiers. Specific limits vary by investor, so the buyer’s lender should confirm.
FHA loans
FHA allows seller contributions up to 6% of the sales price. FHA also includes the Upfront Mortgage Insurance Premium mentioned earlier.
VA loans
VA rules permit certain seller-paid costs and concessions. A commonly cited limit is 4% for certain concessions. VA loans do not require private mortgage insurance but have a funding fee that can be financed.
USDA loans
Seller concessions are often allowed up to 6% under USDA guidelines.
Lender credits vs. seller concessions
- A lender credit reduces your cash at closing in exchange for a slightly higher interest rate.
- A seller concession shifts some buyer costs to the seller, subject to loan program caps and appraisal rules.
Both strategies can lower a buyer’s upfront cash needs, but each impacts either the seller’s net or the buyer’s monthly payment.
San Jose and Santa Clara County factors
Local taxes and recording
Transfer or documentary taxes and recording fees vary and are subject to change. Confirm current schedules with the Santa Clara County Recorder and the City of San Jose before you finalize estimates.
Mello-Roos and special assessments
Some neighborhoods include Mello-Roos or other special tax districts. These affect property tax prorations at closing and ongoing ownership costs. Review the preliminary title report and seller disclosures early.
HOA transfer practices
Many San Jose condos and planned communities charge HOA transfer or estoppel fees. Decide in the contract who pays them.
Earthquake considerations
Earthquake insurance is not usually required by lenders, but it is widely discussed in California. Older homes may involve retrofit disclosures or reports. If required by local rules or requested in negotiations, these can add inspection or compliance costs.
Typical escrow timelines
Bay Area escrows commonly run 21 to 45 days, depending on financing and contingencies. Shorter escrows can add rush fees or require earlier rate locks.
How to reduce your cash at closing
- Ask for seller concessions within your loan’s limits.
- Request lender credits in exchange for a slightly higher rate.
- Shop multiple lenders and compare Loan Estimates about fees and points.
- Negotiate who pays HOA transfer fees and minor repairs.
- Consider which optional items you truly need. Confirm any impacts with your lender and escrow.
What to expect as you approach closing
- 1 to 2 weeks before close: final loan approval wraps up, title search is complete, and your preliminary figures arrive. Buyers with loans receive an updated Closing Disclosure.
- 3 business days before close: buyers must receive the final Closing Disclosure for mortgage loans.
- Day of closing: wire certified funds per escrow instructions, and sign documents. Be vigilant about wire fraud and confirm instructions directly with escrow.
- Post-close: escrow records the deed and releases funds and commissions. You receive keys once recording is confirmed.
Quick checklists
Buyer checklist
- Budget 2% to 5% of the price for closing costs, plus your down payment.
- Request a preliminary title report early to spot liens and special assessments.
- Compare at least two lender Loan Estimates for rates and fees.
- Confirm HOA fees, transfer charges, and document timelines for condos or HOAs.
- Discuss seller concessions and lender credits with your agent and lender.
- Verify wiring instructions with escrow to prevent fraud.
Seller checklist
- Budget 6% to 10% or more for commissions, transfer taxes, and possible concessions.
- Confirm current transfer and recording taxes with the county and city.
- Order disclosures and a preliminary title report early to avoid delays.
- Decide on pre-list repairs, inspections, and staging based on strategy.
- Discuss customary fee splits and concession options with your agent.
- Review a detailed seller net sheet before you go on market.
Work with an advisor who knows the numbers
Closing costs in San Jose are manageable when you see them early and structure the deal around your goals. You get better outcomes when you pair clear numbers with savvy negotiation, accurate pricing, and local know-how. If you want appraisal-informed guidance and a hands-on team that keeps your bottom line front and center, connect with Saundra Leonard for a private consultation.
FAQs
Who typically pays closing costs in a San Jose home sale?
- Buyers often pay lender-related fees, the lender’s title policy, escrow and recording, prepaids, and inspections. Sellers typically pay commissions, transfer taxes, and any agreed credits. The final split follows local custom and your contract.
How much should a San Jose buyer budget on a 1 million dollar purchase?
- Plan for roughly 20,000 to 50,000 dollars in closing costs, or about 2% to 5% of the purchase price, separate from your down payment.
Are there transfer taxes in San Jose and Santa Clara County?
- Yes. The county and City of San Jose may charge documentary or transfer taxes at recording. Amounts vary by jurisdiction and can change, so verify with official offices before closing.
What is the difference between closing costs and prepaids in California?
- Closing costs are fees for services like lending, title, and escrow. Prepaids are funds collected in advance for items such as property taxes, homeowners insurance, and daily interest.
Can a seller pay a buyer’s closing costs with common loan programs?
- Yes. Conventional, FHA, VA, and USDA loans allow seller concessions within program caps. Typical caps range from about 3% to 6%, with a commonly cited 4% limit for certain VA concessions. Your lender will confirm the exact limit for your loan.
Do buyers need an owner’s title policy in San Jose?
- The lender’s title policy is required with a mortgage. The owner’s title policy is optional and commonly recommended to protect your equity and title rights.