Beyond the price: what buying or selling really costs.

Buying: when the money leaves your account

Before you make an offer

• Inspections and reports. In competitive Peninsula sales, sellers often provide inspections up front, but many buyers pay for their own general, roof, sewer lateral, or foundation inspection before writing. Each typically runs from a few hundred to over a thousand dollars.
• Your agent’s compensation. Since January 1, 2025, California requires a written buyer representation agreement, signed no later than your offer, that states your agent’s compensation. It’s fully negotiable and lasts no more than three months. A seller may agree to pay some or all of it, but if they don’t, the agreement says what you owe. Know the answer before you write an offer.

Within days of acceptance

• The initial deposit. Under the standard California purchase contract, the deposit is usually wired to escrow within three business days of acceptance. On the Peninsula, about 3% of the price is common. It counts toward your down payment, but it has to be liquid right away. If you later default, a liquidated damages clause can limit what the seller keeps, and California law caps that amount at 3% of the price for a home you intend to live in.
• Call before you wire. Real estate is a favorite target for wire fraud. Confirm any wiring instructions by calling escrow at a number you looked up yourself. If an email says the account has changed, stop and don’t send.
• Money coming from overseas. Start early. International transfers take time, and lenders usually want to see where the funds came from, often with your two most recent months of bank statements. Move the money in well before closing and let it sit.

During escrow

• Appraisal and loan fees. Your lender lists these on the Loan Estimate, which arrives within three business days after the lender has your application information. Compare Loan Estimates line by line.
• Insurance quotes. Get homeowners insurance quotes early. Premiums have been rising in California, and some homes are harder to insure. Earthquake damage isn’t covered by a standard policy. It’s separate coverage with a deductible, and for California Earthquake Authority policies on homes valued over $1 million, the minimum deductible is 15% of the coverage.

At closing

• The rest of your down payment and closing costs. Your Closing Disclosure arrives at least three business days before closing. It shows the exact cash to wire: escrow and title charges (paid by buyers by custom in San Mateo County, by sellers in Santa Clara County, and negotiable either way), loan charges, recording fees, and prepaid items like interest, the first year of insurance, and the property tax reserve your lender holds.
• City transfer tax, in three cities. San Mateo charges $5.00 per $1,000 of price ($15.00 above $10 million), Palo Alto $3.30, and Hillsborough $0.30. Buyer and seller customarily split it, and the split is negotiable. The other Peninsula cities on this site don’t list a city transfer tax.

After you move in

• The supplemental property tax bill. Your purchase resets the assessed value to roughly the price under Prop 13 (a 1% base rate plus local bonds and charges, typically about 1.1%–1.3% a year on the Peninsula). San Mateo County then bills the difference for the rest of the tax year. Most supplemental bills are mailed within nine months of the purchase. Buy between January and May, and you’ll usually get two: one for the rest of the current tax year and one for the next. It’s due when mailed, and your lender won’t pay it from an impound account, so it’s yours to pay directly. Many buyers haven’t saved for it.
• Ongoing costs. Regular property tax, insurance, any HOA dues and special assessments, utilities, and maintenance. Older Peninsula homes often need roof, electrical, sewer, or drainage work sooner than buyers expect.

A buyer example, with numbers

A $2,500,000 single-family home in San Carlos, with 20% down. These figures are illustrations, not quotes. Your lender’s Loan Estimate and escrow’s estimate are the real numbers.

Supplemental estimate: ($2.5M − $1.0M) × about 1.1% × 0.58, the state proration factor for a November change in ownership (Revenue and Taxation Code §75.41). Close between January and May, and a second bill covers the following full tax year. The earthquake deductible is based on the coverage limit, which is often the rebuild cost, not the price.

Selling: what comes out of the proceeds

Before you list

• Preparation. Cleaning, paint, lighting, landscaping, staging, photography, and sometimes pre-listing inspections. It can be a few thousand dollars or much more, depending on the home. I’ll tell you which spending tends to pay back and which doesn’t.
• City requirements. Some cities add steps at sale. Burlingame, for example, requires a city-witnessed sewer lateral test before transfer when the home’s structures are more than 25 years old, and repairs must be finished and approved before title transfers. Who pays is up to buyer and seller.

During escrow

• Repair credits. After buyer inspections, buyers sometimes ask for a credit or repairs. Plan for some room to negotiate, even on an as-is sale.
• Carrying costs. If you’ve already moved, keep paying the mortgage, insurance, utilities, and upkeep until closing. If you’re buying first, budget for two housing payments, or a bridge loan or HELOC, for a few months.

At closing, deducted from your proceeds

• Commissions. Negotiable, set in the listing agreement. Whether and how much you offer toward a buyer’s agent is your decision.
• County transfer tax: $1.10 per $1,000 of price, customarily paid by the seller.
• City transfer tax in San Mateo, Palo Alto, or Hillsborough, customarily split with the buyer (rates above).
• Escrow and title. In Santa Clara County, including Palo Alto, these are customarily seller-paid. In San Mateo County, sellers usually still pay smaller items, such as the fee to clear the old loan from title and, for condos and townhomes, the HOA document fees. Everything else follows the contract.
• Loan payoffs: the mortgage plus interest through the payoff date, and any HELOC.
• Prorations: property tax and HOA dues are split by the day as of closing, so you may get money back or owe a little.
• California withholding. Escrow generally withholds 3⅓% of the price for state income tax unless you qualify for an exemption, such as a qualifying principal residence sale, certified on FTB Form 593. It’s a prepayment, not the final tax, but it reduces the cash you receive at closing. Foreign sellers may also face 15% federal (FIRPTA) withholding.

After closing

• Tax on the gain. A qualifying sale of your home can exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly. Long-held Peninsula homes often exceed that, so set aside for the tax due the following spring and talk with a CPA before you list.
• Moving and the next home. Movers, storage, temporary housing, or a rent-back if you stay after closing.

A seller example, with numbers

A $2,500,000 single-family home in the city of San Mateo. Again, these are illustrations. Escrow’s estimated settlement statement is the real number.

What to set aside

If you’re buying

• The deposit, liquid and ready to wire within three business days.
• Cash to close from your Loan Estimate, plus a cushion in case final numbers move.
• A separate fund for the supplemental tax bill, so it isn’t a surprise in the first year.
• Move-in costs: movers, rekeying locks, appliances, window coverings.
• A repair and maintenance reserve. A common rule of thumb is 1%–2% of the home’s value a year, more for older homes.
• The reserves your lender requires. Many jumbo loans require several months of payments in the bank after closing, and your lender will give you the exact number.

If you’re selling

• A preparation budget before listing.
• Room for a repair credit after inspections.
• Carrying costs, or two housing payments, if your move and the closing don’t line up.
• The tax on any gain above your exclusion, due the following spring.

---

Rules, rates, and customs change, and the right numbers depend on your loan, your home, and your tax situation. Confirm the details with your lender, escrow officer, or a qualified tax professional before acting. This guide is general information, not tax, legal, or lending advice.