Buying or selling a home in San Francisco comes with a lot of moving parts, and closing costs are one of the biggest questions you will want answered early. You might be wondering who pays what, how the city’s transfer tax fits in, and what to expect on your final settlement statement. You are not alone. With San Francisco’s high prices and a unique transfer tax, a clear plan can save you stress and money.
This guide breaks down buyer and seller closing costs, explains San Francisco’s Real Property Transfer Tax, and shows you how to estimate your numbers with confidence. Let’s dive in.
What closing costs include
Closing costs cover more than a few administrative fees. They typically include:
- Third-party services: escrow/settlement, title insurance, recording, lender fees, appraisal, and inspections.
- Prepaid items and deposits: homeowner’s insurance, property taxes, prepaid interest, and lender escrow deposits.
- Prorations: shared costs such as property taxes and HOA dues based on the day you take or give possession.
- Transactional taxes or fees: city or county transfer taxes and any local assessments.
Some items are paid outside of escrow, while others appear on your final settlement statement. Your purchase agreement sets the allocation, and local custom often guides expectations.
Who typically pays in San Francisco
San Francisco follows strong market customs, but most line items are negotiable. Your contract decides.
Buyer-paid by custom
- Lender-related charges: origination, underwriting/processing, discount points if used.
- Appraisal and credit report.
- Lender’s title insurance policy when financing.
- Recording fees for the buyer’s new deed of trust.
- Homeowner’s insurance, prepaid interest, and escrow deposits for taxes and insurance.
- Many inspections and HOA move-in or transfer fees.
Seller-paid by custom
- Real estate broker commissions. Bay Area totals often range from about 5% to 6% of the sale price, negotiated in the listing agreement. For example, on a $1,500,000 sale, a 5.5% commission equals $82,500.
- Payoff of the seller’s mortgage(s) and any liens.
- Owner’s title insurance in many California transactions. Practices vary by market and contract.
- City and county transfer taxes when agreed by contract and custom. See the San Francisco transfer tax section below.
Items often split or negotiated
- Escrow/settlement fees and some recording charges are commonly split or assigned by contract.
- Transfer tax allocation can shift based on negotiation and market conditions.
Buyer closing costs: what to expect
Here are common buyer line items and how they work:
- Lender fees and origination: often 0.5% to 1.5% of the loan amount, plus flat processing or underwriting charges.
- Discount points: optional, paid to reduce your interest rate.
- Appraisal: typically $500 to $1,500 or more for complex properties.
- Credit report: usually a small charge.
- Title insurance (lender’s policy): required for most loans; premium based on loan amount.
- Escrow/settlement: often split with the seller; total varies by company and price.
- Recording fees: you typically cover the deed of trust for your new loan.
- Insurance and prepaids: first-year homeowner’s insurance, prepaid interest, and escrow deposits for future tax and insurance bills.
- Inspections: home, pest, sewer, and others if requested.
- HOA items: transfer or move-in fees and any disclosed assessments.
Because many fixed fees do not scale with price, buyer closing costs in San Francisco often land around roughly 2% to 5% of the purchase price for financed purchases. The exact number depends on your loan terms, deposits for taxes and insurance, and whether the seller contributes credits.
Seller closing costs in San Francisco
Core seller charges
- Broker commission: often the largest cost and always negotiated.
- Mortgage and lien payoff: clears title at closing.
- Owner’s title insurance premium: commonly a seller expense in many California deals, based on the sale price.
- Seller-side escrow/settlement charges: often split with the buyer.
- HOA items: any seller assessments and prorations.
- Repairs or credits: only if agreed to in the contract.
San Francisco transfer tax: how it works
San Francisco imposes a Real Property Transfer Tax with progressive brackets, which means the rate increases at higher sale prices. Transfers of high-value properties can carry substantial tax amounts. Allocation is set by the purchase agreement and local custom. In many transactions, sellers pay the transfer tax, but parties can negotiate a different split.
Always confirm current rates directly from the city. You can review the current Real Property Transfer Tax brackets and rules on the San Francisco Office of the Treasurer & Tax Collector website. For context, here is an illustrative example only: if a $2,000,000 sale were subject to a 0.5% to 1.0% rate, the tax would range from $10,000 to $20,000. Actual brackets and thresholds change over time, so verify the exact rate for your price point.
Prorations, title, and timing
- Prorations: Property taxes, HOA dues, and certain utilities are prorated based on the days each party owns the property within the billing period. San Francisco property taxes are billed by the Treasurer & Tax Collector, and supplemental assessments can affect calculations.
- Title and liens: Title and escrow teams identify and clear any liens or encumbrances so the buyer receives clear title.
- Disclosures and timing: If you are getting a mortgage, you will receive a Loan Estimate early and a Closing Disclosure at least three business days before closing. These documents outline the final line items and cash to close.
To understand these disclosures, read the CFPB’s overview of the Loan Estimate and their guide to the Closing Disclosure.
How to estimate your closing costs
Use this simple process to build a reliable estimate.
For buyers
- Ask your lender for a Loan Estimate and later a Closing Disclosure.
- Request an escrow and title fee quote tied to your purchase price.
- Budget for inspections and appraisal outside of escrow if needed.
- Ask your lender about expected escrow deposits for taxes and insurance.
- Request a draft settlement statement from escrow before signing.
For sellers
- Request a seller net sheet from your listing agent or escrow company.
- Confirm commission and how it is split between brokerages.
- Ask escrow or title to calculate the San Francisco transfer tax for your price.
- Confirm payoff amounts for all loans and liens.
- Review a preliminary settlement statement early to avoid surprises.
Quick example (illustrative only)
Let’s say the sale price is $1,200,000.
- Seller: commission at 5.5% would be $66,000; owner’s title premium depends on insurer; mortgage payoff varies; San Francisco’s transfer tax would be calculated using the city’s current bracket table.
- Buyer: lender fees and appraisal might total $2,000 to $5,000; lender’s title policy premium depends on the loan amount; escrow deposits for taxes and insurance depend on timing; escrow and recording fees run from a few hundred to a few thousand.
- Typical totals: buyer closing costs (excluding down payment) could land around roughly 2% to 4% depending on loan terms and deposits. Seller totals often fall around 7% to 9% including commission, plus the city transfer tax and loan payoff.
Tips to reduce surprises
- Confirm who pays what in the purchase agreement.
- Get exact title and escrow fee quotes for your price point.
- Ask for a draft settlement statement from escrow early.
- Review HOA documents for transfer fees and assessments.
- Verify the current San Francisco transfer tax bracket for your sale price with escrow or the city.
Ready to plan your closing with clear numbers and fewer surprises? Get in touch with Unknown Company for a tailored home strategy.
FAQs
Who pays San Francisco’s transfer tax in a typical sale?
- In many transactions the seller pays, but the purchase agreement controls the allocation and parties can negotiate a different split.
How much should a buyer budget for closing costs in San Francisco?
- For financed purchases, buyers often budget roughly 2% to 5% of the purchase price, depending on loan terms, deposits, and inspections.
What are the largest seller closing costs in San Francisco?
- Commission is usually the largest, followed by the city’s transfer tax and any mortgage payoff; owner’s title premium and escrow fees also apply.
How are property taxes and HOA dues prorated at closing?
- They are prorated by the number of days each party owns the home in the billing cycle, with adjustments shown on the final settlement statement.
How do mortgages change buyer closing costs?
- Financing adds lender fees, a lender’s title policy, prepaid interest, and escrow deposits for taxes and insurance, which increase cash to close.
Are real estate commissions fixed in San Francisco?
- No. Commission is always negotiated between the seller and the listing brokerage, and any buyer-broker portion is agreed within that total.
Are escrow and title fees split between buyer and seller?
- Often yes in Bay Area practice, but the exact split is set by the purchase agreement and can vary by company and contract.
