If you have bought or sold real estate in another state and are considering doing the same in Los Angeles, know that real estate is local and what might be the norm elsewhere is not necessarily the case in Southern California, and particularly Los Angeles. I know that there are differences even between Northern and Southern California, but I will only address what I am familiar with which is the Los Angeles area market.
There are two types of closings in residential real estate transactions, traditional and escrow. California is an escrow state where everything is handled by a third party and the buyer and seller will not meet at at the closing table. Click here for an overview of the escrow process. No attorneys are involved in the escrow process.
Each city in Los Angeles County may have its own laws and retrofitting requirements which a seller has to abide by in order to close. For a list of the retrofitting requirements by city click here. By the way, Metro Retrofitting is the company I use to ensure compliance, which is part of the escrow process.
There are terms on the California Purchase contract regarding who pays for what which is pretty standard here but may be different from other parts of the country. One of my first sales was for an absentee owner who I took for granted was familiar with the norm here and it cost me. These are some of the expectations in my market:
- Buyer and Seller split the escrow fees proportionally, with the seller usually paying a little more.
- Seller pays for buyer’s title report.
- Seller pays for all government mandated reports – Natural Hazard Report, any city report if required.
- Seller pays for all city retrofitting requirements which differs by city.
- Seller pays city and county transfer fees. Private transfer fees are rare and not standard.
- Seller pays for any preparation of applicable Homeowners Association documents.
- It is standard for the Seller to pay for a home warranty for the buyer, but this may be denied or negotiated.
- Any and all inspections are paid for by the Buyer.
The above should hopefully avoid any surprises for the seller upon receiving the purchase contract with boxes checked to reflect the above responsibilities.
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