Sticker shock at closing is real, especially on the Peninsula. Between lender fees, title and escrow charges, taxes, and prepaids, it can feel like a second down payment. You want a clear number and a simple breakdown so you can plan with confidence. In this guide, you will learn what closing costs are, how much San Mateo buyers typically pay, what line items to expect, and smart ways to reduce or finance them. Let’s dive in.
What closing costs are
Closing costs are the fees, taxes, and prepaids you pay at escrow to finalize your purchase. They are separate from your down payment and the purchase price. Typical items include lender fees, appraisal, title and escrow services, recording, inspections, insurance, and reserves for taxes and interest.
How much San Mateo buyers pay
Most buyers budget about 2% to 5% of the purchase price for closing costs. The percentages are similar to national guidance, but dollar amounts are higher here because prices are higher. In San Mateo County, city transfer taxes and specific fees can vary by city. Always confirm the property’s city and current county fees with your escrow team.
Who usually pays what in California
Customs can vary by city and by contract, but here is what you typically see in California and on the Peninsula.
Loan costs
You usually pay the lender’s fees, which may include application, underwriting, and processing. You also pay for the appraisal and your credit report. If you choose to buy discount points, those are a buyer expense. If your program requires mortgage insurance or a VA funding fee, that is part of your closing costs.
Title and escrow
Two title policies are common. The lender’s title policy is typically a buyer cost because the lender requires it. The owner’s title policy is often paid by the seller in many California transactions, but this is negotiable. Escrow fees for handling the transaction are commonly split 50-50 between buyer and seller, though local practice and your contract control.
Government fees and taxes
Buyers usually pay recording fees to record the deed and loan documents. Transfer taxes can be charged by the county or city, and who pays can vary by local custom and negotiation. Property taxes are prorated based on the closing date. Review your preliminary title report for any special assessments that may apply.
Inspections and reports
You typically pay for general home inspections and any specialty inspections you order, such as pest, roof, or sewer lateral where required by local ordinance. In condos and many HOAs, you may also see an HOA document or estoppel fee.
Insurance and prepaids
Most lenders require you to prepay the first year of homeowners insurance. You will also prepay interest from closing to your first payment and may fund an impound account for property taxes and insurance.
Miscellaneous
Plan for smaller items like courier or wire fees, notary, and certain HOA transfer or move-in costs.
Example closing cost scenarios
The examples below are for planning only. Your lender’s Loan Estimate and a title or escrow fee quote will give you a precise, itemized picture.
Scenario A: Condo at $1,200,000
- Approximate 2.5% estimate: $30,000 total
- Loan fees, appraisal, credit: $3,000
- Buyer portion of escrow and lender’s title policy: $3,000
- Insurance and tax impounds: $4,000
- Inspections and HOA estoppel: $1,000
- Recording, courier, wire: $500
- Contingency for prepaid taxes or supplemental bills: $18,500
- Approximate higher-end 4.0% estimate: $48,000
Scenario B: Single-family home at $2,500,000
- Approximate 2.5% estimate: $62,500
- Approximate higher-end 4.0% estimate: $100,000
Title insurance and escrow fees scale with price. If the seller pays the owner’s title policy, you save that line item.
San Mateo items to verify
- Transfer taxes. Some cities and the county charge transfer taxes that vary by jurisdiction and custom on who pays. Confirm with your escrow officer for the exact city.
- Recording fees. Check the current San Mateo County Recorder schedule through your escrow company.
- Local ordinances. Some cities have inspection or compliance requirements, such as sewer lateral testing or energy items. Ask early so you can plan the timing and cost.
- HOA fees. Condos and PUDs may charge estoppel, transfer, capital contributions, or move-in fees. Request the HOA documents early.
- Assistance programs. San Mateo County and state programs can help certain buyers with down payment or closing costs if you qualify. Ask your lender to review options.
Ways to reduce or finance your closing costs
- Negotiate a seller credit. A seller can agree to pay a portion of your closing costs, subject to your loan program’s limits. Structure it with your lender’s guidance.
- Use lender credits. Choosing a slightly higher interest rate can generate credits to offset closing costs.
- Roll costs into the loan. Some programs allow you to finance parts of your costs through a larger loan amount or by applying seller credits to fees or points.
- Shop your loan. Compare Loan Estimates from multiple lenders. Fees and points vary.
- Confirm title and escrow splits. In many California transactions, sellers pay the owner’s policy. If not customary for your city, you can still request it.
- Explore first-time buyer aid. County or state programs may provide funds for down payment or closing costs if you meet eligibility rules.
How closing day works and wire safety
Most Peninsula purchases close through an escrow company. You will sign final loan and title documents, fund your down payment and closing costs, and the escrow company will record your deed.
Protect yourself from wire fraud with these steps:
- Never rely only on emailed wiring instructions. Before sending funds, call the escrow company using a phone number you obtain independently, such as from their official website or a business card you already have.
- Confirm the escrow number, closing date, and contact person by phone on the same day you plan to wire.
- Do not click links or call numbers within an “updated wiring instructions” email. Independently source the contact info.
- If anything feels off, pause and call your real estate agent and escrow officer immediately. Your bank can help if you act quickly.
- Budget for small wire or courier fees and plan for bank cut-off times.
Quick buyer checklist for closing day
- Government-issued photo ID for all signers.
- Final wired funds or a cashier’s check if permitted by your escrow company.
- Proof of homeowners insurance and your lender’s required coverage.
- Final loan conditions and any last signatures your lender requests.
- Verified wiring instructions confirmed by phone with escrow.
Getting your personalized estimate
Your lender must provide a Loan Estimate within three business days after you apply. Ask your title or escrow company for a companion estimate that covers title, escrow, recording, and transfer items. Together, these show your full picture.
If you want a clear, line-by-line walkthrough for your specific San Mateo price point, reach out and I will coordinate estimates from trusted local escrow partners and your lender. When you are ready to plan your purchase with confidence, connect with Bob Bredel.
FAQs
What are closing costs for San Mateo buyers and how much should I budget?
- Most buyers plan for about 2% to 5% of the purchase price, with higher local prices leading to larger dollar amounts.
Who pays transfer taxes in San Mateo County home purchases?
- It varies by city and by contract. Sellers often pay in many California transactions, but it is negotiable and should be confirmed with escrow for the specific city.
How are property taxes handled at closing in San Mateo?
- Taxes are prorated based on the closing date, and you may also fund an impound account and later receive a supplemental tax bill.
Can I ask for a seller credit toward closing costs in a competitive market?
- Yes. Seller credits are common tools, subject to loan program limits. Structure the request with your agent and lender as part of your offer strategy.
What is the difference between a down payment and closing costs?
- The down payment reduces your loan amount and is part of the price. Closing costs are separate fees, taxes, and prepaids needed to complete the transaction.
How do I avoid wire fraud when sending closing funds?
- Verify wiring instructions by phone using a number you source independently, and never rely solely on emailed instructions for final wire details.
