Your sale price is not your payout. Between agent commission, transfer taxes, title and escrow fees, prorations, and state withholding, a California seller commonly parts with several percent of the price before the net wire lands. If you know those line items before you list, you can price with clear eyes and avoid a closing-day surprise.
Here is how we think about seller closing costs in California, with a Los Angeles lens and the math laid out.
What closing costs mean for a seller
For a seller, closing costs are every dollar subtracted from your sale price on the settlement statement. Your net proceeds are what remains after those costs and your loan payoff. In California the largest costs are either negotiable or predictable, so you can estimate them well before you list.
The line items that come out of your sale price
Agent commission
Commission is usually the single biggest cost. It is negotiable, and how the buyer agent gets paid has shifted since the 2024 industry settlement, so old assumptions no longer apply. Ask any agent to show you exactly what their fee covers and how a buyer agent will be compensated in your deal.
Transfer taxes
California charges a county documentary transfer tax of about $1.10 per $1,000 of sale price. Inside the City of Los Angeles, the city adds its own base transfer tax on top of the county rate [VERIFY: confirm current LA city base transfer tax; historically about $4.50 per $1,000].
High-value LA sales carry more. Under Measure ULA, sales within Los Angeles city limits are taxed an extra 4% on prices above $5.4 million and 5.5% on prices above $10.9 million, using thresholds that adjust every July 1 for inflation. On a $6 million sale, that ULA layer alone is $240,000. It applies to the full price, not only the amount over the threshold, so a sale that creeps just past the line gets expensive fast.
Title and escrow
You will pay for owner title insurance and your share of escrow fees. In much of Southern California the seller customarily pays the owner title policy, though this is negotiable and varies by county. On a typical sale these run a modest fraction of a percent of the price.
Prorations and loan payoff
At closing you settle property taxes and any HOA dues up to the day of sale, and your mortgage payoff comes out of the proceeds. A payoff is not a fee, but it is money that leaves the table, so include it in your net math.
State withholding and capital gains
California requires escrow to withhold 3 1/3 percent (3.33%) of the sale price and send it to the Franchise Tax Board, reported on Form 593, unless you qualify for an exemption. Withholding is not required when the price is $100,000 or less, and sellers can elect to base it on actual gain instead of the full price. This is a prepayment against your tax, not an extra tax, but it reduces the cash you take away at closing.
Gains are a separate question. If the property was your primary home, the federal Section 121 exclusion can shield up to $250,000 of gain if you are single, or $500,000 if you are married filing jointly, when you meet the ownership and use tests. On an investment property that exclusion does not apply, which is where a 1031 exchange can matter. We cover that in our guide to 1031 exchanges and capital gains in California.
An owner-operator view of net proceeds
If this were our building, we would model net proceeds before setting a list price, not after an offer arrives. Here is a simplified, illustrative example on an $800,000 Los Angeles sale with a $300,000 loan balance. Your real numbers will differ.
- Sale price: $800,000
- Agent commission (example 5%): $40,000
- County and city transfer taxes, below the ULA threshold: roughly $4,500 [VERIFY against current LA rates]
- Title and escrow (example): about $6,000
- Loan payoff: $300,000
- Estimated net before taxes: about $449,500
State withholding of 3.33% would set aside roughly $26,600 at closing, credited against your tax bill and reconciled when you file. Change the commission rate, the loan balance, or push the price past the ULA threshold, and the net moves in ways that are easy to see once the line items sit on the page.
How to keep more of your proceeds
A few moves reliably protect your net. Negotiate commission and understand what it buys. Time the sale with your tax year and your gain picture in mind. Price against real comparable sales rather than a hopeful number, since carrying costs during extra weeks on market quietly eat proceeds. For investment property, weigh a 1031 exchange before you sign, because the option closes once you take the cash. Our note on the best time to sell an investment property in Los Angeles walks through the timing side.
If you also want the buyer side of the same closing table, see our breakdown of buyer closing costs in California. When you want a number for your specific property, you can request a price opinion and we will model the net with you.
Frequently asked questions
What percent of the sale price goes to closing costs in California?
For most sellers, total costs land from a few percent up to around 7 or 8 percent of the price, driven mostly by commission. High-value Los Angeles sales that trigger Measure ULA can run well above that.
Who pays transfer tax in California, the buyer or the seller?
By custom the seller usually pays the transfer tax, though it is negotiable and can be split. The county rate applies everywhere; cities like Los Angeles add their own.
Can I avoid the 3.33% California withholding?
You may qualify for an exemption or a reduced amount, for example if the property was your principal residence or the price is $100,000 or less, and you can elect to base withholding on gain using Form 593. Confirm your situation with a tax professional.
Do I owe capital gains tax when I sell?
It depends on your gain and how the property was used. A primary residence may qualify for the Section 121 exclusion; an investment property may not, though a 1031 exchange can defer the gain. The right answer is specific to your numbers.
This article is general information, not financial, tax, or legal advice. Tax rules and local transfer taxes change, so speak with a qualified professional, or with us about your specific deal, before you act.