Closing on a home is exciting—but it’s also where the hidden fees can hit hard if you’re not prepared. In Silicon Valley, where real estate values are among the highest in the country, closing costs can add up fast.
Whether you’re buying or selling, understanding the breakdown of closing costs in Silicon Valley real estate is critical to avoiding last-minute surprises and negotiating from a position of strength.
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TLDR – Quick Guide
- Closing costs typically range from 2% to 5% of the home’s purchase price in Silicon Valley.
- Buyers and sellers both have financial responsibilities at closing.
- Common costs include title insurance, escrow fees, lender charges, transfer taxes, and HOA fees.
- Knowing what to expect helps you budget more accurately and negotiate smarter.
What Are Closing Costs?
Closing costs are all the fees, services, and taxes required to finalize a real estate transaction. These costs are paid at the close of escrow and are in addition to your down payment or proceeds from the sale.
They are typically divided between buyer and seller, depending on what’s customary in the region and what’s agreed upon in the purchase contract.
Typical Closing Costs for Buyers
Here’s what buyers can expect to pay at closing in Silicon Valley:
- Escrow Fees – Split with the seller unless negotiated otherwise.
- Title Insurance – Lender’s policy is typically the buyer’s responsibility.
- Loan Origination Fees – Charged by your lender for processing the mortgage.
- Appraisal Fee – Required by lenders to verify property value.
- Credit Report Fee – Minor, but usually included in lender fees.
- Underwriting Fees – Administrative cost of loan approval.
- Recording Fees – Paid to the county to record the new ownership.
- Prepaid Taxes & Insurance – Upfront payments for homeowners insurance and property taxes.
- HOA Transfer Fees & Dues – If the home is part of a homeowners association.
Buyer Tip: Most of these fees are non-negotiable—but you can shop for services like escrow and insurance providers to control costs.
Typical Closing Costs for Sellers
Sellers can expect:
- Escrow Fees – Shared with buyer or paid fully, depending on the agreement.
- Owner’s Title Insurance – Typically paid by the seller.
- Real Estate Agent Commissions – Usually 5–6% of the sale price, split between buyer and seller agents.
- Transfer Taxes – City and county transfer fees apply based on location and sale price.
- HOA Document Fees – Charged for providing required association paperwork to the buyer.
- Repairs or Credits – Agreed-upon items negotiated during inspections.
Seller Tip: Factor these costs into your net sheet early so you’re not surprised by the final payout at close.
How Much Are Closing Costs in Silicon Valley?
Because home prices in the region are often $1M+, even modest percentage fees add up quickly. Here’s a general estimate:
- Buyers: $20,000 – $50,000+
- Sellers: 6% – 8% of the sale price (primarily driven by agent commissions and transfer taxes)
The exact number will depend on the home’s price, your financing, and negotiated terms.
Can Closing Costs Be Negotiated?
Yes—to a degree. You can:
- Ask the seller for credits toward closing costs
- Shop for lower-cost escrow and title services
- Negotiate who pays for what in the purchase contract
- Work with a lender offering reduced fees or credits
In a competitive market, buyers usually carry more of the cost burden. But in slower conditions, sellers may be more willing to contribute.
Key Takeaways
- Closing costs in Silicon Valley are higher than average due to elevated home prices.
- Buyers should budget 2%–5% of the home’s purchase price on top of their down payment.
- Sellers should expect fees totaling 6%–8%, with the bulk going to agent commissions and transfer taxes.
- Understanding these costs helps you budget accurately and negotiate more effectively.
- Mike D’Ambrosio’s team walks clients through a detailed net sheet before making or accepting any offers.
FAQs
1. Are closing costs included in the mortgage?
No. They are typically paid out-of-pocket at closing, though some lenders offer credits or roll certain fees into the loan with limitations.
2. Can I ask the seller to pay my closing costs?
Yes, especially in buyer’s markets. In competitive situations, this is less common but still negotiable.
3. Do I pay property taxes at closing?
Yes. Buyers usually prepay a portion of upcoming taxes and insurance premiums.
4. What’s the biggest closing cost for sellers?
Real estate agent commission is usually the largest single cost, typically 5%–6% of the sale price.
5. Do I need to pay closing costs if I pay in cash?
Yes, although they’re lower without lender fees. You’ll still pay for escrow, title, recording, and any negotiated transfer taxes.