Pam, Home Buyer in South San Francisco,...


Asked by Pam, South San Francisco, CA Tue Mar 30, 2010

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J. Mario Preza, CRB, CDPE’s answer
The usual costs to buy a house include
*loan fees,
*appraisal fee,
*inspection fees,
*credit report fee,
*discount points,
*origination points,
*processing fee,
*document fees,
*funding fees,
*(miscellaneous fees),
*notary fees,
*escrow fees,
*title insurance,
*hazard insurance, and
*a proration of anticipated expenses, e.g., taxes and insurance (up to 4 months reserves), and in some cases where applicable,
*private mortgage insurance;

by paying cash you'll avoid all but the escrow and some prorations, if you choose not to insure or to have the title insured either. The prudent thing to do is to get an estimate from the escrow company for the expected costs associated with the purchase amount of your intended transaction.

J. Mario Preza, CRB
DRE 00668667
0 votes Thank Flag Link Thu Dec 9, 2010
if you are in escrow, you need to get a estimated statement from the title company as to what
your costs will be....... and it depends on the date of close as prorated taxes will be a consideration
Donna Black
Web Reference:
0 votes Thank Flag Link Tue Mar 30, 2010
Hi Pam, you will have to pay for the CLTA policy, which is a one time fee whenever you purchase a home. You have the escrow fee & notary fee. The best way to know exactly how much it will be is to provide the purchase price along with who pays for the city and or county transfer tax. If you are buying in SSF, there is usually no fee for the buyer.

Again, without knowing what you paid, I would guess that your closing cost will be around 1/2 % of the purchase price.


Cashin Company
0 votes Thank Flag Link Tue Mar 30, 2010
Hello Pam -

I am a realtor with experience in Illinois, Florida and South Carolina. I have had many clients fortunate enough to purchase for cash and I recently purchased my condo for cash in Chicago, Illinois.

You are going to save big on costs like loan orgination and points and fees regarding a loan you might put on the property.

The costs that you are not going to be able to avoid will be title fees, attorney fees, realtor fees (if you are paying a buyers commission), any taxes to the county or state you are in (Ie. Cook county, Illinois was $7.50/1000k purchase price. This will be different in the SFO area), I would estimate that your costs might be 1% of the purchase price when you make the offer, this is what I normally prep my clients who are in a cash purchase position. I will normally tell my clients to consider 2-2.5% if they are using a mortgage.

One thing to think about when you are considering purchasing for cash is you are going to loose your interest dedcution on your federal taxes. You can still take the depreciation on the building, but this would not be as much as taking both. This could add up to a large amount of cash over 10,20,30 years especially of you are still in the job market. As an investment in real estate the biggest and best tool you have is leverage, you might be able to recoup that down payment and costs quicker than you would ever imagine. You might be able to make 100% on your investment of $50,000 versus 15% of a $300,000 home after 4 years, and only when your sell or refinance. If you do mortgage the property be careful of prepayment penalties, if you have to sell early then you planned this might have been extra cash in your pocket.

Also you could invest the rest into the market, if you love real estate you might consider a Real Estate Investment Trust (REIT). You would have ready access to your equity if you ever need it.

If you need an expert in the South San Francisco area, I have a few associates in your area, please feel free to contact me through Trulia.

Best of luck on your search.
0 votes Thank Flag Link Tue Mar 30, 2010
If you don't get an answer from a local agent on here, I suggest contacting a local title company. They can give you a sort list of the fees to be charged and will be glad to furnish it to you. Typically, cash sales have very low closing costs. (If you are the seller, you didn't say whether you are buying or selling) Do you have a mortgage that will be paid off from the proceeds? If so, there will be some additional costs. I would be sure to include that when asking about closing costs. I hope this was of some help.
0 votes Thank Flag Link Tue Mar 30, 2010
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