The Hidden Costs of Selling a House in California

The Hidden Costs of Selling a House in California


LOS ANGELES, CA – With the median home value in the Greater Los Angeles area sitting at over $700,000, it comes as no surprise that owning a house in California can be expensive, the hidden costs and fees make it worst, especially when the U.S. median home value is only $226,800.

However, while many individuals expect to invest money into making their house purchase, some may not take into account the immense cost that also comes with selling a home.

Sellers need to firstly prepare themselves for major expenses like real estate commissions. Average broker fees range between 5-6% of the selling price of a home. Even on the low end of this range, in order to sell a $500,000 home, a seller must recognize that $25,000 of this sale will go directly to an agent rather than to their pocket.

While some people may choose to sell their home by owner, statistics show that these homes end up selling for at least 6% less than they would with professional representation.

The Professionals at the Local Records Office reached out to a well-known broker, Timothy Johnson, 39, from Greencress Brokers and Real Estate. This is what Johnson had to say about the over-priced hidden costs and fees regarding property sales:

“Over the years selling and closing fees have skyrocketed. With these fees came hidden costs to the seller having the agent benefit from it. The real estate game is changing and it’s changing fast”

Hidden Costs and Fees Are Not the Only Things California Homeowners Have to Worry About

On top of these fees, there are also many costs associated with bringing a property up to a sellable standard, especially if a homeowner is looking to move out as quickly as possible. To appeal to prospective buyers, sellers must invest both time and money into proper cleaning and home improvements, including decluttering junk, updating light fixtures, replacing appliances, cleaning carpets, power washing and landscaping.

Some sellers may even choose to stage their homes, paying a decorator thousands of dollars upfront, plus $500-$600 per month to make each room as eye-catching as possible.

California Home Inspection Hidden Costs

After attracting a buyer and moving on to the negotiations phase, sellers must also expect a home inspection prior to closing. Though the cost of an inspection is usually on the buyer, the seller will likely be responsible for any needed repairs. The most expensive issue for all sellers in the state of California is the septic system.

California requires that sellers conform with the state’s Title 5 regulations, and any seller not connected to a town sewer must produce a passing Title 5 certificate that is less than two years old.

If the inspection fails, a new septic system will cost a seller anywhere between $15,000-$50,000 if not more, and the process will take months, especially since it cannot be replaced during the winter when the ground is frozen.

Along with septic issues, other common reasons to fail home inspections include roofing issues, old knob-and-tube wiring, foundation issues, the presence of mold/asbestos, vermiculite insulation, and illegal plumbing and drains, all of which can cost thousands of dollars to repair.

“Home inspections are necessary when selling a house, there isn’t any way to avoid it. Inspections help the new homebuyer figure out what he or she is buying” Johnson tells a Local Records Office representative.

California Closing Costs Hidden Costs

Once all repairs are in order, there are still closing costs to keep in mind. In California, a huge closing cost is tax stamps, where sellers pay $4.56 for every thousand dollars. For a $500,000 house, tax stamps alone will cost a seller $2,280. The second biggest expense at closing is attorney fees, averaging around $1,000 per closing.

Hidden Costs and Califonia Selling Fees Pile on To of Each Other

On top of these larger fees, additional costs include recording fees, deed preparation, discharge fees, discharge tracking fees, smoke detector inspection costs, courier fees to pay off any liens on a home, and other minor costs. With total closing costs typically running between $3,000-$8,000, on top of all other expenses, selling a home can be much more costly than many anticipate.