Buying or selling a property in Tustin involves more than signing a contract and transferring ownership. One of the biggest sources of confusion for home buyers and sellers is who pays closing costs in Tustin. The answer depends on the type of real estate transaction, regional customs, and the details of the negotiation.
Did you know?
Tustin, California, is home to the massive Tustin Blimp Hangars, among the world’s largest wooden structures. Built during World War II, these hangars once housed military airships and remain iconic due to their sheer size—each over 1,000 feet long and 17 stories high. Though no longer in military use, they’ve been featured in films and TV shows. Their historical significance and architectural marvels make them a defining part of Tustin’s identity.
Key Takeaways
- In Tustin, closing costs are split between buyers and sellers, but who pays what depends on county customs and the specific real estate transaction.
- Buyers typically cover mortgage-related fees, escrow, insurance, home inspection, and sometimes title insurance, depending on location.
- Sellers usually pay real estate agent commissions and transfer tax and may also cover the title insurance policy in Northern California.
- Your loan type—whether a VA loan, FHA loan, or conventional loan—impacts which fees can be negotiated or shifted.
- Always review your closing disclosure, compare lenders, and consult with a real estate attorney to reduce expenses and avoid surprises.
Understanding What Closing Costs Are
Closing costs refer to all the expenses, fees, and payments made to finalize a home sale or home loan. These costs go beyond the down payment and vary by loan type, location, and finance structure.
Common components include:
- Loan origination fees, loan officer fees, and mortgage broker commissions
- Home inspection, termite inspection, pest reports, and environmental assessments
- Appraisal to determine market value and fair market value
- Escrow fees, title search, and title insurance
- Property tax, transfer tax, and back taxes
- Homeowners insurance policy, mortgage insurance, flood insurance, and optional home warranty
- Homeowner association (HOA) documentation and transfer fees
- Legal document prep, real estate attorney or estate agent review
- Credit report, underwriting, and discount points
- Prepaid interest, prorated taxes, and insurance
Who Typically Pays Closing Costs in Tustin?
In Tustin:
- Buyers generally pay for their mortgage-related fees, home inspection, loan origination, and escrow services.
- Sellers typically pay for the real estate agent commissions, title insurance policy, and transfer tax.
However, the allocation of closing costs in California can vary by county, especially between Northern and Southern California. For example, in Southern California, buyers often pay title insurance, while in Northern California, sellers usually cover it. This is where local customs play a significant role.
Buyer’s Closing Costs Breakdown
1. Mortgage and Loan Fees
Buyers pay a loan origination fee and associated costs from the lender, including credit score checks and underwriting. Rocket Mortgage, Fannie Mae, and other lending entities may also charge additional fees.
2. Home Inspection and Appraisal
Buyers are responsible for home inspections, termite reports, and appraisals to ensure the value aligns with the agreed price. These inspections may also detect lead paint, asbestos, or other risks.
3. Title and Escrow Services
Buyers may split or pay the escrow fees and title search costs depending on zip code and the negotiation. Title insurance is often buyer-paid in SoCal, while NorCal may vary.
4. Insurance and Tax-Related Costs
In addition to property tax prepayments, buyers may need mortgage insurance or flood insurance, depending on the lender and location. Some lenders also require upfront homeowners insurance payment.
5. Prepaid Interest and Points
Prepaid interest covers the time between closing and the first mortgage payment. Buyers can also buy discount points to lower their interest rate.
Seller’s Closing Costs Breakdown
1. Real Estate Agent Commissions
Sellers commonly pay both their real estate agent and the buyer’s agent. The total commission typically runs 5–6% of the sales price.
2. Title and Transfer Fees
In most California counties, sellers pay for transfer tax and may cover the title insurance policy in Northern California.
3. HOA, Debts, and Liens
Sellers must pay off any debt, lien, or homeowner association transfer fees. This also includes resolving any outstanding property taxes.
4. Concessions and Incentives
In a high-inventory market like Los Angeles or San Diego, sellers may offer to pay some of the buyer’s closing costs to close the deal fast.
Closing Costs by Loan Type
VA Loans
The United States Department of Veterans Affairs limits some fees for VA loans. In many Tustin transactions, sellers cover loan origination and underwriting costs.
FHA and USDA Loans
Federal Housing Administration and USDA home loans allow seller contributions toward closing costs. These can cover up to 6% of the home value in some cases.
Conventional Loans
With conventional loans, buyers cover most loan origination, credit, insurance, and inspection expenses unless otherwise negotiated. Refinancing also involves closing costs.
Negotiating Closing Costs in Tustin
Closing costs can often be negotiated in Tustin. You can:
- Request a seller credit toward closing costs
- Compare lenders, mortgage brokers, and insurance providers to reduce fees
- Opt for a higher interest rate to lower upfront costs
- Shop for title and escrow services for better rates
Factors That Influence Closing Costs
Location & Zip Code
County-specific customs greatly affect who pays what. Traditions differ in cities like San Francisco or Sacramento from those in Orange County or Fresno.
Property Type and Ownership
Investment homes, for-sale-by-owner deals, or rent-to-own deals might involve alternate closing costs and fewer real estate agent fees.
Market Conditions
In a competitive real estate market, buyers might pay more fees to secure a deal. In slower periods, sellers may offer concessions or incentives.
Frequently Asked Questions
Who pays most of the closing costs in Tustin?
It depends on the county, but typically, buyers cover loan-related costs while sellers handle title fees, transfer tax, and agent commissions.
Do buyers always pay title insurance in California?
Not always. In Southern California, buyers usually pay for title insurance, while in Northern California, the seller often pays for it.
Can sellers offer to pay buyer closing costs?
Yes. In slower markets or during negotiations, sellers often offer closing cost credits to speed up the home sale.
Are closing costs higher in California than in other states?
California closing costs are among the highest in the United States, largely due to higher property values, transfer taxes, and regional customs.
Can I negotiate my closing costs?
Absolutely. Buyers can negotiate with sellers, shop around for lower lender and insurance fees, or accept a higher interest rate in exchange for reduced upfront costs.
Final Thoughts
Whether you’re purchasing, selling, or refinancing a home in Tustin, understanding who pays closing costs in Tustin is critical for proper budget planning and personal finance strategy. Closing costs vary based on loan type, contract, county customs, and market value.
To ensure transparency, work with a trusted real estate agent, mortgage broker, and real estate attorney. Review your closing disclosure, check for hidden fees, and always ask questions. That way, you’ll complete your real estate transaction confidently and without surprises.
If you’re planning a home sale or purchase in Tustin, complete our quick form or call us at (949) 232-0897. We’ll provide estimated closing costs and help you make your next move smoothly.