Wondering how much cash you will need to close on a home in Petaluma? You are not alone. Between lender fees, title charges, and prepaid taxes, it can feel hard to pin down a number. In this guide, you will learn what closing costs include, what buyers typically pay in Sonoma County, how much to budget, and smart steps to get precise figures before you sign. Let’s dive in.
What closing costs include
Closing costs are one-time fees and prepaids you pay at settlement, separate from your down payment. They usually include lender charges, third-party fees like appraisal and inspections, title and escrow services, county recording, and prorated items such as property taxes, insurance, and interest.
As a rule of thumb in California, buyers often budget about 2% to 5% of the purchase price for closing costs. Your actual number depends on your loan type, purchase price, whether the seller pays certain items, and the size of your tax and insurance reserves.
What buyers usually pay in Petaluma
Local practice can vary by transaction, but here is what buyers commonly cover in Sonoma County and Petaluma, along with typical ranges. Each item is negotiable and should be verified with your escrow officer and lender.
Escrow fee
- What it covers: The escrow company coordinates documents, funds, and closing.
- Typical range: About $500 to $2,500, often higher on larger purchases.
- Who usually pays: Often split 50-50 between buyer and seller, but it depends on negotiations.
Title insurance
- What it covers: Two policies are common. The lender’s policy protects the lender and is usually required. The owner’s policy protects the buyer’s ownership.
- Typical range: Lender’s policy often about $300 to $1,500 or more depending on loan size. Owner’s policy is larger, often $1,000 to $3,000 or more on mid-priced Bay Area homes.
- Who usually pays: In many Northern California markets, sellers often pay for the owner’s policy and buyers pay the lender’s policy. Always confirm in writing for your deal.
Appraisal fee
- What it covers: An independent valuation required by most lenders.
- Typical range: About $500 to $1,200 or more. Many single-family homes in Metro Petaluma run about $600 to $900.
- Who usually pays: Buyer.
Home inspections
- What they cover: General inspection, plus optional roof, sewer scope, HVAC, and pest or termite.
- Typical range: General inspection about $300 to $700. Termite or pest about $150 to $450. Sewer scope about $150 to $400.
- Who usually pays: Buyer.
Lender fees and points
- What they cover: Application, processing, underwriting, credit report, and any points.
- Typical range: Often $500 to $3,000 or more, or expressed as 0.5% to 1% of the loan amount.
- Who usually pays: Buyer, though you can negotiate seller credits to offset costs.
Recording and transfer taxes
- What they cover: County recording for the deed and mortgage. Documentary or transfer taxes may be imposed by the county and sometimes by the city.
- Typical range: Recording fees are usually in the hundreds. Transfer tax varies by jurisdiction.
- Who usually pays: In many California markets the seller pays documentary transfer tax, while buyers pay recording fees for their loan. Always verify Sonoma County and City of Petaluma practices with your title company. Ask your escrow officer to list documentary transfer tax as a separate line item on your estimates.
Prepaids and escrow reserves
- What they cover: Your first year of homeowners insurance, prepaid property taxes based on the closing date, prepaid interest from funding to your first payment, and any escrow reserves for future tax and insurance payments.
- Typical range: Insurance may run about $800 to $2,000 or more depending on coverage. Tax and interest prepaids vary with your closing date and loan. Sonoma County’s base tax rate is roughly 1% of assessed value, plus voter-approved assessments that vary by neighborhood.
- Who usually pays: Buyer.
HOA transfer fees and dues
- What they cover: HOA document preparation, transfer fees, and prorated dues.
- Typical range: HOA paperwork is often $0 to $500 or more. Monthly dues are prorated based on closing date.
- Who usually pays: Often each party pays their side of HOA fees, and dues are prorated. Check the HOA documents and local custom.
Local inspections and certifications
- What they cover: Items such as sewer, septic, or well certifications if applicable.
- Typical range: Varies by property type and requirement.
- Who usually pays: Often the buyer, unless negotiated otherwise.
Wiring, notary, and courier
- What they cover: Wiring your funds, mobile notary, and courier services.
- Typical range: About $25 to $150.
- Who usually pays: Buyer.
Home warranty
- What it covers: A one-year service plan for major systems and appliances.
- Typical range: About $350 to $700.
- Who usually pays: Negotiable. Sometimes the seller offers one as a concession.
Sonoma County taxes and assessments
California’s base property tax is set by Proposition 13 at roughly 1% of assessed value. Most Sonoma County parcels also include voter-approved local assessments. A starting estimate of 1.1% to 1.5% can help you plan, but actual assessments vary by neighborhood. Review the preliminary title report and ask the Sonoma County Assessor for parcel-specific rates.
Property taxes are prorated at closing based on the settlement date. If your loan has impounds, you will fund tax and insurance reserves at closing so the lender can pay those bills on schedule.
How much to budget
A simple rule of thumb for buyers in Petaluma is to set aside about 2% to 5% of the purchase price for closing costs. Your exact figure depends on whether you pay points, how you split escrow and title, and how large your reserves are.
Example: $700,000 purchase
These are illustrative estimates to show how the math works. Your numbers will come from your Loan Estimate and the escrow officer’s statement.
- 2% budget: $14,000
- 3% budget: $21,000
- 4% budget: $28,000
- Typical line items: appraisal about $700; general plus termite inspections about $700 to $1,000; lender fees about $2,000; lender’s title policy about $800; buyer share of escrow about $1,000; prepaids and reserves often $6,000 to $10,000 depending on closing date and impound requirements.
Example: $1,200,000 purchase
Larger transactions see higher title premiums and escrow fees, plus larger tax and insurance reserves.
- 2% budget: $24,000
- 3% budget: $36,000
- 4% budget: $48,000
Who usually pays what here
In many Northern California transactions, sellers pay the owner’s title insurance policy and any documentary or transfer taxes, while escrow fees are often split and buyers pay the lender’s policy and loan-related costs. That said, everything is negotiable and customs can shift with market conditions.
For accuracy, ask your escrow officer to confirm who is paying each line item and to include the documentary transfer tax as a separate line on your preliminary statement. You can also contact the Sonoma County Recorder or the City of Petaluma to confirm any current transfer tax rules.
Timeline, documents, and exact cash to close
- Loan Estimate: Within three business days of your loan application, your lender must provide a Loan Estimate. This outlines projected lender fees, rate, and prepaids.
- Preliminary escrow statement: Your title and escrow company can prepare an itemized estimate of title premiums, escrow charges, recording fees, and any transfer tax.
- Closing Disclosure: At least three business days before signing, you will receive the final Closing Disclosure with your exact cash to close.
- Wire safety: Always verify wiring instructions by calling your known escrow contact at a published office number. Do not rely on email-only changes.
3-step budgeting checklist
Request your Loan Estimate from your lender. Confirm interest rate, points, lender fees, and projected prepaids.
Ask your escrow officer for a preliminary closing statement. Make sure it shows title premiums, escrow fees, county recording, and any documentary transfer tax.
Add inspection costs and any optional services like a home warranty or HOA fees. Set aside a contingency of about 1% of the purchase price, or at least $2,000 to $5,000, for surprises and prorations.
Negotiation strategies that can help
- Seller credits: You can ask the seller to credit part of your closing costs. Lender limits may apply based on your loan program and down payment.
- Who pays what: Negotiate owner’s title insurance and transfer taxes if local custom allows, especially in a buyer-favorable market.
- Lender shopping: Compare Loan Estimates side by side. Ask each lender to itemize fees and any lender credits.
Local programs and assistance
If you are a first-time buyer, check for Sonoma County or City of Petaluma homebuyer assistance programs that may help with down payment or closing costs. Availability and eligibility change over time, so contact the county housing authority or city housing department for current details.
Final thoughts and next steps
Closing costs do not have to be a mystery. Start with the 2% to 5% guide, then tighten your forecast using your Loan Estimate and the escrow officer’s preliminary statement. Confirm local transfer tax and who pays which items early, and set aside a small cushion for prorations. When you are ready for clear, local guidance and strong negotiation on credits and fees, connect with Jen Birmingham for buyer representation in Petaluma and across Sonoma County.
FAQs
Who pays transfer tax in Petaluma and Sonoma County?
- Many California sellers pay documentary or transfer taxes and the owner’s title policy, but it is negotiable. Confirm current rates and who pays with your escrow officer, the Sonoma County Recorder, and the City of Petaluma.
How much should a Petaluma buyer budget for closing costs?
- Plan for about 2% to 5% of the purchase price, then refine with your Loan Estimate and the escrow company’s preliminary statement.
Can the seller pay some or all of my closing costs?
- Yes. Seller credits are common and can cover lender fees, points, and other costs, subject to lender limits based on your loan type and down payment.
Are property taxes prorated at closing for Sonoma County homes?
- Yes. Taxes are prorated based on your closing date, and many buyers fund an escrow reserve for future tax payments.
Who pays HOA transfer and estoppel fees in Petaluma?
- Dues are prorated, and transfer or estoppel fees are often negotiable. Check the HOA documents and confirm custom with the escrow officer.
When will I know my exact cash to close?
- Your lender must provide a Closing Disclosure at least three business days before closing. It lists the exact cash to close and all final line items.
