Are closing costs making your Sherman Oaks move feel more complicated than it should be? You are not alone. Between lender fees, title and escrow, transfer taxes, and prorations, it is easy to lose track of who pays what and how much to budget.
This guide breaks down typical buyer and seller closing costs in Sherman Oaks, what is customary in Los Angeles County, and how to estimate your total so you avoid last-minute surprises. You will also find practical checklists to help you plan with confidence.
Let’s dive in.
What closing costs cover
Closing costs are the fees and prorations required to transfer ownership and, if you are financing, to close your mortgage. They are separate from your down payment and are paid at or just before closing. Both buyers and sellers have closing costs, though the mix of line items is different.
Actual totals vary by price, financing, and local charges. They can also change based on negotiations in your purchase agreement, HOA-related fees, and whether city transfer taxes apply.
How much to budget in Sherman Oaks
- Buyers often budget about 2% to 5% of the purchase price for closing costs, not including the down payment. This range covers lender charges, title and escrow, inspections, recording fees, and prepaids like taxes and insurance.
- Sellers often budget about 6% to 10% of the sale price when real estate commissions are included. Without commissions, a seller’s direct closing costs are usually smaller and include transfer taxes, the owner’s title policy, escrow fees, and payoff of any existing liens.
Totals vary with price, loan terms, whether you request or offer concessions, HOA or special assessments, and city or county transfer taxes.
Buyer closing costs: line by line
Loan-related charges
- Loan origination or application fee
- Discount points if you choose to buy down your rate
- Underwriting and processing fees
- Lender’s title insurance policy premium
- Appraisal fee
- Credit report fee
These apply when you finance your purchase. Cash buyers skip most of these.
Title, escrow, and recording
- Buyer’s share of escrow fee, commonly split 50-50 in Los Angeles County
- Recording fees for the new trust deed and loan documents
- Notary fees for your loan package
- Title search or curative items requested by the buyer or lender
Inspections and reports
- General home inspection plus any specialized inspections you request
- Pest or termite inspection, with any remediation negotiated separately
- Survey if requested by your lender or for your own due diligence
Expect a typical home inspection to run about $300 to $600 depending on scope.
Prepaids and reserves
- Prepaid property taxes and prorations for your ownership period
- Prepaid homeowners insurance and any lender-required escrow reserves
- Interest prorations on your new mortgage
HOA-related
- HOA transfer or processing fees for new owner registration may be charged to the buyer, while the seller often pays the estoppel letter. Practices vary by association.
Miscellaneous
- Escrow impounds if your lender requires them
- Home warranty if you choose to purchase one or request it in your offer
Seller closing costs: line by line
Real estate commissions
- Typically the largest single seller cost. The combined commission is usually paid by the seller and disbursed at closing.
Title, escrow, and transfer
- Owner’s title insurance policy, which is customarily paid by the seller in California
- Seller’s share of escrow fees, commonly split 50-50 in Los Angeles County
- Recording fees for the grant deed and any reconveyance related to your payoff
- City and county documentary transfer taxes, commonly paid by the seller but negotiable
Payoff and release of encumbrances
- Payoff of your mortgage(s), home equity lines, and any recorded liens or judgments
- Recording of reconveyance and related fees
Disclosures, compliance, and condition
- Statutory disclosures and required reports prepared for the buyer
- Termite or repair work you agree to complete, or credits negotiated in escrow
Prorations and adjustments
- Property tax proration for the period you owned the home
- HOA dues proration if you prepaid for the current billing period
Miscellaneous
- Notary and settlement statement preparation as part of escrow
- Seller-paid home warranty if offered as a marketing incentive
What is customary in Los Angeles County
“Customary” means typical, not mandatory. You can negotiate these items in your offer and counteroffer.
- Escrow fees are commonly split 50-50 between buyer and seller.
- The seller customarily pays for the owner’s title insurance policy.
- The buyer pays for the lender’s title policy when financing.
- The buyer typically pays for loan-related charges, appraisal, and credit report.
- Documentary and city transfer taxes are commonly paid by the seller, but are negotiable.
Put the allocation of costs in writing in your purchase agreement to avoid confusion later.
City of Los Angeles specifics for Sherman Oaks
Sherman Oaks is a neighborhood within the City of Los Angeles. That means city rules and taxes may apply in addition to county fees.
Transfer taxes in the City of Los Angeles
Two layers can apply at closing: a county documentary transfer tax and a city-level transfer tax. In Los Angeles, sellers commonly pay the city transfer tax, though the contract can allocate it differently. Rates and thresholds can change, so confirm the current practice with your escrow or title officer.
Property tax proration and supplemental assessments
Base property taxes in California are set under Proposition 13 at about 1 percent of assessed value plus any voter-approved local assessments. At closing, taxes are prorated between buyer and seller for the period each owns the property. After a change of ownership, buyers may receive a supplemental property tax bill once the new assessed value is recorded. Supplemental taxes are typically the buyer’s responsibility unless you negotiate otherwise.
Mello-Roos and special assessments
Some areas include Mello-Roos or special district assessments. These will appear in the preliminary title report and seller disclosures. Review them closely since they can add hundreds or thousands of dollars per year.
HOA documents and fees
Condominium and planned communities often require estoppel letters and charge related fees. Sellers often pay the estoppel, while buyers may pay transfer or processing fees. Check your HOA’s policy early so you can plan your budget.
How to estimate your closing costs
Buyers: a simple 3-step workflow
Get pre-approved and review your Loan Estimate. Your lender will itemize estimated loan charges and prepaids. If you are comparing programs, ask for scenario-specific estimates.
Add non-loan items. Include appraisal, inspections, your share of escrow, title premiums, recording, HOA-related fees, prepaid taxes, homeowners insurance, and any required reserves. For planning, use the 2 percent to 5 percent range as a starting point and refine with actual quotes.
Request quotes and documents. Ask your escrow and title team for a fee quote and review a sample closing statement. Update your estimate once you are in contract and receive your Closing Disclosure.
Sellers: a clear net-to-seller checklist
Confirm your commission. Many sellers start by estimating the combined commission, then build the rest of the net sheet around it.
Add seller-side costs. Include the owner’s title policy, your share of escrow fees, city and county transfer taxes, recording and reconveyance fees, and any home warranty you offer.
Factor in payoffs and prorations. Add your mortgage payoff(s), property tax proration, HOA proration, and any credits or repair allowances you agree to during escrow. As a rule of thumb, use 6 percent to 10 percent of the sale price including commissions to budget, then refine with a detailed net sheet from your agent and estimates from escrow and title.
Documents to request early
- Buyers: Loan Estimate, sample Closing Disclosure, and fee quotes from escrow and title
- Sellers: Preliminary title report and a net proceeds worksheet from your agent
- Both: A written estimate of escrow and title fees and a check of current city transfer tax requirements
Ways to avoid surprises
- Confirm city transfer taxes before listing or writing an offer. City policies can change and they materially affect your bottom line.
- Review the preliminary title report early. Look for liens, easements, Mello-Roos, and special assessments so you can plan around them.
- Clarify HOA fees upfront. Ask who pays the estoppel, transfer, and move-in or move-out fees so you can budget correctly.
- Put cost allocations in the contract. Spell out who pays escrow, title endorsements, transfer taxes, and warranties.
- Build a cushion. Even with good estimates, plan for small variances at the final Closing Disclosure.
Your next step
If you want a calm, well-organized closing, start with clarity. Whether you are buying or selling in Sherman Oaks, we can prepare a tailored cost breakdown, coordinate fee quotes from escrow and title, and walk you through each line so you feel confident from offer to keys.
Connect with The Payab Group for white-glove guidance backed by local expertise and a full-service team.
FAQs
Who pays transfer taxes in Sherman Oaks closings?
- In the City of Los Angeles, sellers commonly pay city and county documentary transfer taxes, but the payment is negotiable and should be confirmed with escrow or title.
Does the seller pay for the owner’s title policy in Los Angeles County?
- Yes, it is customary for the seller to pay for the owner’s title insurance policy, while the buyer pays for the lender’s policy if there is a loan.
Are escrow fees split in Los Angeles County transactions?
- Escrow fees are commonly split 50-50 between buyer and seller, though the parties can agree to a different split in the contract.
What should a buyer include when estimating closing costs?
- Include lender fees, appraisal, inspections, lender’s title policy, your share of escrow, recording, prepaid taxes and insurance, and reserves, using 2 percent to 5 percent as a starting range.
What items are prepaid versus prorated at closing?
- Upfront items often include lender, escrow, and title fees plus inspections, while prorations typically include property taxes, HOA dues, and utilities for the period each party owns the property.
Will buyers receive a supplemental property tax bill after closing?
- Buyers may receive a supplemental tax bill after reassessment due to the change of ownership, and it is typically the buyer’s responsibility unless negotiated otherwise.
Can HOA fees affect closing costs in Sherman Oaks condos or townhomes?
- Yes, associations may charge estoppel and transfer or processing fees, with estoppel commonly paid by the seller and transfer fees sometimes charged to the buyer depending on the HOA.
Are transfer taxes the same across Los Angeles County cities?
- No, some cities have their own transfer taxes or different practices. Sherman Oaks follows City of Los Angeles rules, so confirm current city requirements when planning your budget.
