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marlenka/Getty Images June 15, 2022 Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you live in California and are considering , the headlines about surging prices might have you thinking about a big potential profit. However, being in the seller’s shoes comes with plenty of questions. What’s the best way to list your home, what must you disclose to prospective buyers, in California? Read on to find out. Are you ready to sell
Before you pack your bags and count your money, you need to know one key piece of information: Where you’re planning to go next. Buying a home right now comes with record-high prices and . Take a look at your finances to make sure you have plenty of cash to cover moving. Think about whether you can afford to move to a new place while your existing home is on the market — or if you’ll need to . You might also consider renting if you’re not quite sure of where you want to land more permanently.
Preparing to sell
If you’re ready, it’s time to consider what to do before you list your house. Realtor Steve Davies of RE/MAX Gold in El Dorado Hills, California, says that the pre-listing stage is one of the most valuable pieces of the selling puzzle. Make sure the house is picture-perfect before you invite buyers to come calling. “You never get a second chance to make a first impression,” Davies says. “When a potential buyer walks up to the property and steps inside, you want them to say ‘wow.’” Is it worth upgrading your home before you sell
You’re about to sell the place, so why should you invest even more money into it? The answer depends on . The reality is that most home renovations do not recoup 100 percent of their costs, so while small upgrades can help, you may be better off skipping really major expenses. And buyers might not share your same taste, so it’s probably not worth sinking a ton of money into a specific look. What should you repair before selling your home
The best way to determine what, if any, repairs you should make before you list your home is to get a professional . This will likely cost around $500 (more if your property is especially large), but it’s a proactive way of identifying major issues that a buyer’s home inspection will uncover. If it uncovers major issues with your roof or plumbing, for example, a buyer might request a credit to cover the repair on their own — or even walk away from the deal. Staging your home
In addition to paying to take care of any issues that need to be resolved, you may want to consider paying to . Staging is exactly what it sounds like: designing a scene that makes a buyer want to be a character on that stage. This might involve simply rearranging your existing furniture in a setup that makes the rooms look more livable. Or it could be a bigger project that requires putting things in storage and renting different furniture. A good real estate agent will advise you on whether staging can make a meaningful difference in your home’s value.
When is the best time to sell a house in California
Typically, the best time to put your house on the market, in California or anywhere, is when it can . If a property stays on the market for a long time, it could no longer be considered “hot” — and run the risk of prospective buyers thinking there might be something wrong with it. Davies says that seasonality is no longer a strong factor in his area, near Sacramento, but he does acknowledge that spring and summer tend to attract larger crowds, which can fuel more intense competition. “Everyone is excited for seasonal change to warmer weather, and the market heats up during the spring,” he says. “The gardens are blooming and everything feels fresh and new, but there is more inventory and more competition.” In the fall and winter, he says there is typically less inventory and a smaller pool of buyers. Find a local California Realtor
— sellers are typically responsible for covering their commissions out of the sale proceeds, usually between 5 and 6 percent of the total sale price. But those fees can be well worth it. Selling is a complicated process that involves lots negotiation and the potential emotional weight of leaving a place you have called home for a long time. There’s also plenty of paperwork, which is especially true in California versus other states. The can make the process as smooth as possible, connecting you with the best resources and working on your behalf. Don’t hesitate to before settling on one. Price your home competitively
Davies says that selecting the right listing price is the most important factor that a seller needs to consider. And it’s where having an agent with expert-level knowledge about makes all the difference. “In Northern California’s current changing market, making sure not to overprice the property will allow a seller to have the most viewers,” Davies says. “This creates demand and gives the best opportunity to receive a great offer on both price and terms. You can do everything right, but if you miss on price, you’ll be sitting on the market with all the other overpriced listings.” The same rule applies in Southern California: A competitively priced home is one of the best routes to a bidding war, while an overpriced home can be a pathway to frustration.
Documents and disclosures in California
Seller s disclosures
Every seller in the state of California has a legal obligation to share a lot of information with buyers about the condition of the property, the potential for additional taxes and the natural hazards that could impact it. You will need to complete a lengthy transfer that informs a buyer about a broad range of questions: Is the water heater braced to prevent it from falling over during an earthquake? What kind of local taxes will the new resident be subject to? Your real estate agent can help walk you through it. Be honest about everything — otherwise, you could be liable for damages down the road. Required documents
There are several documents you are required to present when you’re selling a house in California. These include: Transfer disclosure statement: This is the form referenced above, which details all the information you can share about the property to the best of your knowledge. Natural hazard disclosure: This tells buyers whether the property is located in an area prone to flood hazards, fire hazards and earthquakes. Megan’s Law disclosure: allows buyers to access a database that includes information about registered sex offenders who reside in the area. Statewide buyer and seller advisory: A form that outlines the obligations of both buyers and sellers. Outside of disclosure information, be prepared to prove that the property is indeed yours with a copy of the original purchase agreement, a signed deed and an affidavit of title. Other common documents
Depending on where you live, you may have , such as statements and advisories, you’ll need to complete. And if you live in a neighborhood or a condo governed by a , you will need to share the HOA bylaws as well.
Need to sell your home fast Consider these alternatives
If you need to move immediately, you might not have the luxury of waiting, comparing offers and crawling to a closing day. Here’s a rundown of how to sell your house in California quickly. Compare iBuyers: Companies like Opendoor, Offerpad and RedfinNow will make an offer on your house without even seeing it. That might sound appealing, but there is a catch: is designed to buy your house at a below-market value, so that the company can then sell it for a profit. Look for an all-cash offer: Instead of waiting for a lender to review and process a buyer’s home loan application, you might be lucky enough to receive an . Nearly 28 percent of all home sales are all-cash deals, according to the latest , so it’s not as uncommon as you might think. Keep in mind, though, that someone buying with all cash may leverage the fact that there is no need for a lender and offer you a lower price. List as-is: If you attach to your listing, you’re making it clear that there is no room for the typical back-and-forth negotiation about repairs. That can speed things up considerably — but can also lead to lower offers if there is work to be done. Add quick curb appeal: Rent a power washer to give your driveway or siding an extra shine, wash the windows, paint the garage — these are just a few fast and frugal ways to get your house ready to sell. today, and list your home tomorrow knowing that it looks its best for buyers. The closing
When closing day arrives, you have something to look forward to: your money. However, you don’t get to pocket all of it. If you have any outstanding mortgage debt, you’ll immediately need to pay it off. Plus, there are to cover: Costs of selling a home in California
Realtor commissions: The real estate agents who helped make the deal happen have to get paid. Typically, the buyer’s agent receives about 3 percent of the purchase price, and your agent (the seller’s) also receives around 3 percent. The seller, however, is responsible for paying both of them. So, if you sell your home for $800,000, you would owe $48,000 in commissions. (Unless either agent has agreed to a commission discount, which is a definite possibility these days.) Title insurance: In some parts of the state, you may have to pay for . The cost will vary based on the purchase price. Transfer taxes: Budget an appropriate amount of money for paying to transfer the title or deed to the buyer. In most places across the state, transfer taxes are $1.10 per $1,000 of the purchase price. In some cities, like Oakland, Emeryville and Culver City, transfer tax rates can be higher. Escrow fees: You may also pay for an to manage the buyer’s earnest money. The fees for this service vary based on the price of the home. Seller concessions: You might wind up agreeing to some to help the buyer with their closing costs. However, it’s a seller’s market, so think twice about whether you need to cover any of the buyer’s expenses. Attorney fees: If you hire a real estate attorney, you will need to pay him or her at closing, too. These fees vary, so be sure to ask for an estimate as you compare different legal options. FAQs
What do you need to sell your home in California
The most important piece of selling your home in California is complying with state and local disclosure requirements to inform prospective buyers about potential risks, safety hazards and additional tax implications with the property. And while you don’t technically need a real estate agent or a real estate attorney, both of these roles can be a big help in navigating these compliance complexities.
Do you need an attorney to sell your house in California
The law does not require you to have legal representation to sell your house in the Golden State. However, it’s still wise to consider hiring a real estate attorney. While you’ll have one more expense to cover, he or she can comb through the contract language (which can be confusing for anyone who doesn’t speak legalese) to make sure you are protected in the transaction.
What taxes do you pay when you sell your house in California
You’ll likely have to pay for transferring the ownership of the property from you to the buyer. The most common charge for these taxes is $1.10 per $1,000 of property value. So, for example, if you sold your home for $700,000, you would likely owe $770 in transfer taxes. There are notable exceptions, though. , for example, real estate transfer taxes on properties sold for more than $5 million total 2.5 percent of the purchase price.
How fast can you sell your home in California
According to the latest , the median number of days it took to sell a single-family house in the state was eight. Every market is different, though. In Los Angeles, for example, the average home goes pending in 29 days, . If you really want to sell your house fast, consider pricing it lower to attract more attention, or look at iBuyers that can give you an offer in 24 hours.
Who pays for the title policy in California
It depends on where in the state your property is located. . In Northern California, however, that responsibility is typically flipped to the buyer. Like many things in real estate, this may be negotiable, so be sure to include this expense in your negotiations.
What is the average closing cost for a seller in California
Data from ClosingCorp shows that the in California add up to $8,219. However, it’s important to understand that closing costs for sellers are highly dependent on the price you’re able to command for your house. Since real estate commissions, title insurance and transfer taxes are all based on a percentage of the price, the best starting point for estimating your closing costs is the listing price with 6 percent for commissions, 1 percent for transfer taxes and between 0.5 percent and 1 percent for title insurance. SHARE: Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles