California is not only one of the largest entertainment areas in the world, but it also has one of the most flourishing economies in North America and the world. As much as it seems California’s economy is on the rise, the same cannot be said about the real estate market. Recently, there has been a decline in home sales and an increase in home prices. According to surveys, the median cost of a house in California is more than double the national average house value. To put this further into perspective, experts believe that home values will continue to skyrocket by another 5-8% in the coming year.
While buying a home in California carries a premium compared to the rest of the country, closing costs are also quite expensive, and among the things that any potential homeowner should bear in mind. When finalizing a real estate deal, you have to cover some costs like lender fees, attorney fees, agent commissions, taxes, and survey costs.
Based on current statistics, New York, Hawaii and Delaware have the most expensive closing costs in America. California closing costs range higher than the national average for specific charges like document preparation, origination fees, and tax services. These closing cost increase in some cases since not all lenders charge some of these costs.
When calculating closing costs in California, the factors that you should consider including the lender, the location of the house, the type of the house, and additional services that may be required such as appraisals, termite and pest inspections, and other variables. Depending on the lender the homebuyer is using, there is also a charge for processing the documentation of the loan. Where there are signs of insect issues, the lender can also ask for a pest inspection which will also affect the overall closing costs.
Home sellers in California also have to worry about the many fees that they have to pay after selling their homes in the form of sales commissions, code compliance reports, home inspections, and even escrow fees. While a lot of these fees can sometimes be negotiated, it hardly reduces the total amount.
With California ranking as one of the most expensive states in terms of closing costs, the increasing prices of houses and reducing the inventory of homes are likely to make buying a home quite stressful for first-time buyers. Remember to look around, compare prices and negotiate the charges before you make a final buying decision.
Work with an experienced, local real estate agent to help you navigate the waters of the California market.
