Seller Guide
Every line that stands between the contract price and the wire you receive, and how to make an escrow officer show you all of them before you list.
Sellers negotiate the price and then discover the sale. The number agreed in the purchase agreement is the top of a column, not the bottom of one, and between the two sit a loan payoff, three separate transfer taxes in the City of Los Angeles, title and escrow charges, brokerage compensation, a set of point-of-sale reports and retrofits the city requires, association document fees, property tax prorations, state withholding and whatever was conceded after the buyer's inspections. None of these is hidden. All of them are routinely underestimated, and the underestimation is almost always in the same direction.
This guide builds the seller side of a Los Angeles closing honestly, line by line, and explains where each figure comes from and who controls it. It deliberately does not print commission rates, escrow fees or title premiums, because those are set by the parties and by individual companies, they vary by transaction and by price, and a number quoted in a guide is precisely the kind of stale figure that produces a bad decision. What it does instead is name each charge, explain the mechanism behind it, and tell you who to ask for a current, written, dated estimate.
Nothing here is legal, tax or accounting advice, and the customary allocation of costs between buyer and seller in Southern California is a custom rather than a rule. Every one of these items is negotiable and the purchase agreement governs. The useful discipline is to obtain a written seller's net sheet before the property is listed, revise it when an offer is accepted, and compare it against the estimated closing statement escrow produces before you sign. Sellers who do that are rarely surprised. Sellers who rely on a percentage they remember from a previous sale in a different city usually are.
A seller's net sheet is an estimate prepared before or during marketing, usually by your agent working with an escrow or title officer, that starts at an assumed sale price and subtracts every anticipated cost to produce an estimated figure at closing. It is a planning document, not a binding one. Its value lies entirely in whether the assumptions behind it are current and complete, which is why the first question to ask about any net sheet is what date it was prepared and what price, loan payoff and closing date it assumed.
The estimated closing statement, sometimes called a settlement statement, is prepared by the escrow holder as closing approaches and shows the actual debits and credits that will be applied to your side of the transaction. This is the document that matters. It should be reviewed line by line, not skimmed for the bottom figure, and any item you do not recognise should be queried before you sign rather than afterwards. Escrow officers expect these questions and answer them quickly; the awkward moment is discovering an unexplained charge after funds have disbursed.
Build the net sheet at several prices rather than one. In the City of Los Angeles, where a transfer tax threshold can move the total cost of a sale by a large sum for a small change in price, a single-price net sheet actively conceals the decision you are making. Ask for the same document at three or four prices spanning your likely range, and ask that transfer taxes appear as separate line items rather than as one blended figure. The shape of the curve, not the single number, is what tells you where to price.
The largest deduction for most sellers is the payoff of existing financing. Escrow orders a written demand from each lender showing the principal balance, accrued interest to an assumed payoff date, any prepayment provision, and the lender's own demand and reconveyance fees. Two points catch sellers out. Interest accrues daily, so a delayed closing changes the figure, and demands are issued good through a specific date, after which they must be updated. A home equity line of credit must generally be closed as well as paid, or the line remains available to draw and the reconveyance will not issue.
The preliminary title report will disclose everything else of record, and this is where sellers occasionally find items they had forgotten or never knew about. Property tax liens, contractor liens, judgment liens, tax liens filed by the Franchise Tax Board or the Internal Revenue Service, solar financing recorded as a fixture filing, Property Assessed Clean Energy assessments repaid through the tax bill, and easements or agreements that will need to be addressed all surface here. Some must be paid at closing, some can be subordinated or removed, and each takes time.
Order the preliminary title report early, before listing rather than after an offer. Clearing a defect takes days or weeks depending on who has to sign a release, and doing that work during a thirty day escrow with a buyer waiting is the expensive way to do it. If title reveals an old deed of trust that was paid but never reconveyed, an heirship or trust issue, or a recorded agreement affecting the property, your title officer and, where needed, a California real estate attorney can usually resolve it, but only if there is time to.
Every recorded conveyance in Los Angeles County carries a county documentary transfer tax. The Los Angeles County Registrar-Recorder and County Clerk states the county rate as $0.55 per $500, or fractional part thereof, computed on the consideration or value conveyed exclusive of the value of any lien or encumbrance remaining on the property at the time of sale. That works out to eleven cents per hundred dollars of value, and it applies to sales at every price point regardless of the city in which the property sits. It is small relative to the city layer, but it is a real line and it should appear separately on your statement rather than being folded into a single transfer tax figure.
Inside the City of Los Angeles, a city documentary transfer tax applies on top of the county tax at $2.25 per $500, which is 0.45 percent, and above the applicable thresholds the Measure ULA tax applies as well. As published by the City of Los Angeles Office of Finance for transactions closing after 30 June 2026, ULA is charged at 4 percent on conveyances from $5,400,000 up to $10,900,000, and 5.5 percent on conveyances of $10,900,000 or more, in each case on the full value of the conveyance rather than only the portion above the threshold. The Office of Finance describes the resulting combined range as 0.45 percent to 5.95 percent.
Outside the City of Los Angeles the picture changes entirely, and it does not simplify. The County Registrar-Recorder publishes a documentary transfer tax bulletin listing the cities that levy above the county baseline, which include Culver City, Pomona, Redondo Beach and Santa Monica, several of which use tiered schedules of their own. Do not assume a neighbouring city mirrors either Los Angeles or the county default, and do not assume last year's schedule still applies. Ask your title officer to identify the taxing jurisdiction from the parcel number and to quote the schedule in effect for your expected recording date, in writing.
Allocation of transfer taxes between buyer and seller is a matter of contract rather than a rule of law. The Office of Finance states that the transferee is responsible for payment and that the transferor may also be liable, while the prevailing custom across much of Southern California places transfer taxes on the seller. At the upper end of the Los Angeles market the allocation of the ULA component is a genuine negotiating term rather than a formality, and a split or a partial credit is an entirely ordinary outcome. Address it explicitly in the purchase agreement, and make sure your net sheet reflects what the agreement actually says rather than what custom would have suggested.
A residential sale typically involves two title policies and one escrow. The owner's policy insures the buyer's title, the lender's policy insures the lender's security interest, and escrow charges a fee for holding funds and documents, obtaining demands, prorating, preparing the settlement statement and recording. Premiums for title insurance are filed by each underwriter and vary by policy type and by the amount insured. Escrow fees vary by company and by transaction. Neither is a fixed percentage, and neither should be assumed from a prior transaction in another county or another price band.
Which side pays which is customary rather than legal, and the custom in Southern California differs from the custom in Northern California and can differ within Los Angeles County itself. Because it is a custom, it is negotiable, and in practice the purchase agreement allocates it explicitly. The C.A.R. residential purchase agreement contains a schedule of who pays what, and any deviation from the printed default is simply a term to be negotiated like any other. In a competitive negotiation these allocations move; treat them as consideration rather than as fixed overhead.
Beyond the headline premium and escrow fee sit a series of smaller charges that are individually modest and collectively meaningful: recording fees, courier and wire fees, a natural hazard disclosure report, a home warranty if one is offered, notary charges, loan payoff demand and reconveyance fees, and any statutory recording surcharges in effect. None of these is unusual and none is negotiable in the sense of being avoidable, but they should all appear on the estimate you are shown. If your net sheet has a single line reading closing costs with a round number next to it, ask for it itemised.
How brokerage compensation is agreed and communicated changed materially on 17 August 2024. The National Association of Realtors states that offers of compensation to buyer brokers are no longer permitted on multiple listing services, that sellers may still offer compensation to a buyer's broker off the multiple listing service, and that sellers may offer buyer concessions such as contributions toward the buyer's closing costs through the multiple listing service. Agreements must contain a conspicuous statement that broker fees and commissions are fully negotiable and not set by law, and agents working with buyers must have a written agreement with a specific disclosure of compensation before touring a home.
For a seller, the practical consequence is that compensation is now two separate decisions rather than one. The first is what you agree to pay your own listing broker, set out in your listing agreement. The second is whether, and how, you will contribute to the buyer's representation, which is now a term negotiated within each individual transaction rather than advertised in advance to the market. Both decisions have consequences for how many buyers your property reaches and for what your net looks like, and they deserve to be made deliberately rather than inherited from a form.
This guide does not quote a rate, because there is no customary rate, no legally set rate, and no rate that would remain accurate. What a seller should insist on is clarity: what is being paid, to whom, in exchange for what services, on what terms, and how the figure appears on the settlement statement. Ask your broker to walk you through the compensation provisions of the listing agreement before signing, and ask specifically how any contribution to a buyer's broker will be handled if a buyer arrives unrepresented or represented on different terms.
The City of Los Angeles imposes obligations that attach to the act of selling. The Department of Building and Safety states that Section 96.300 of the Los Angeles Municipal Code requires the seller of residential property within the city to apply for a Report of Residential Property Records, commonly called the 9A report, and to deliver it before the sale agreement or before escrow closes. The report discloses the property's zoning, permitted use and certain recorded matters, and it is a frequent source of unwelcome information about occupancy or use that does not match the permit record.
The same department identifies a set of retrofit obligations. Plumbing fixtures must comply with the city's water conservation ordinance under Section 122.03 of the Municipal Code, administered through the Department of Water and Power. Seismic or excess flow gas shut-off valves are required under Section 94.1217 for buildings containing fuel gas piping. Smoke detectors and carbon monoxide detectors are required under Sections 91.8603 and 91.420.6.2.3 respectively, with additional obligations for buildings of three or more units including security lighting and locks under Section 91.8607, impact glazing for sliding doors, and release mechanisms on window and door bars. Requirements differ outside the city, so confirm what applies to your specific jurisdiction.
If the property lies in a high or very high fire hazard severity zone, California Civil Code Section 1102.19 requires the seller to provide documentation of compliance with defensible space requirements, and where documentation is not available at closing the buyer and seller may agree in writing that the buyer will obtain it within one year. A separate fire hardening disclosure obligation also applies to properties in those zones. If the property is in a common interest development, Civil Code Section 4525 requires the seller to provide a defined package of association documents, and Section 4530 permits the association to charge a reasonable fee based on its actual cost, individually itemised and separately billed from other assessments and fees.
Escrow prorates recurring charges between the parties as of the closing date. Property taxes are the main one. Los Angeles County operates on a fiscal year running from 1 July to 30 June, with the first installment due 1 November and delinquent after 10 December, and the second due 1 February and delinquent after 10 April, per the County Treasurer and Tax Collector. Whether you are credited or debited at closing depends on which installments have been paid relative to your closing date, and a seller who has already paid the year forward will typically receive a credit. Association dues, and any prepaid items, are prorated on the same principle.
California requires withholding on real property sales unless an exemption applies. The Franchise Tax Board's standard rate is 3 1/3 percent of the total sale price, remitted through escrow and reported on Form 593, with an alternative election available to compute withholding on estimated gain at the seller's maximum California rate. Exemptions include sales at $100,000 or less and sales of a principal residence where the seller meets the ownership and use tests, certified under penalty of perjury on Form 593. Falsely certifying an exemption carries a penalty of $1,000 or 20 percent of the required withholding, whichever is greater. Where the seller is a foreign person, FIRPTA withholding applies separately at a rate the Internal Revenue Service generally states as 15 percent of the amount realised.
The last category is the one no net sheet can predict: what the buyer asks for after inspections. Physical inspection, roof, sewer lateral, chimney, pool, geological and specialty reports generate a request for repairs or a credit, and the negotiation that follows can move real money late in escrow when the seller's leverage is at its weakest. The countermeasure is to inspect before listing. A seller who already knows what the reports will say can price for it, repair it, or disclose it, and can decline a late demand from a position of knowledge rather than absorbing it because the alternative is losing the buyer.
Rates, ordinances, customary cost allocations and withholding rules change, and every transaction differs; confirm current figures with the relevant agency, your escrow and title officers, and your own tax and legal advisers before relying on anything here.
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