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The Costs of Buying a Home in the East Bay
Purchasing a home in the East Bay is an exciting milestone, but it’s important to be prepared for the associated costs involved. From downpayment to closing costs and point of sale ordinances per city and inspection costs, this is article is designed to help you plan your next purchase.
Key Costs to Consider
Down Payment: Typically down payments range from 5-20% but can go as high as 100% if its an all cash purchase, or as low as 3% for conventional loans or 3.5% for FHA loans (so depending on the loan type, your credit scores and the lender). Additionally, there are some grant and loan programs available to cover down payments so you may be able to put as even less money down leaving just closing costs to budget for.
Closing Costs: These generally range from 2-5% of the home’s purchase price and include fees for escrow, title insurance, loan origination, and more.
Escrow and Title Fees: Escrow and title fees are costs paid by the buyer to ensure the transaction is properly managed and the property title is legally transferred without any liens or disputes.
Transfer Tax Fees: City and county transfer tax fees are one-time charges paid as part of your closing costs, based on the purchase price and these funds typically go toward local government budgets, funding public services such as schools, infrastructure maintenance, and community programs.
Property Taxes: Property taxes in California are about 1-1.25% and in Alameda County around 1.4% of the home’s assessed value annually which is prepaid based on the time of year you are closing and the property tax calendar youre in .
Homeowners Insurance: Required by lenders, this protects against risks such as fire, theft, or natural disasters. Homeowners insurance can range anywhere from $2,000 to $10,000 or more annually, depending on the area. With recent fires in Los Angeles currently unfolding, we have yet to see how the industry or even the FAIR Plan may be impacted.
Buyer Commission
The buyer's agent commission can paid by the seller as i has in the past if agreed to in the contract, as part of the total transaction costs. However, in some cases, this cost can be structured as a buyer concession, meaning it is added to the buyer's closing costs. This will vary depending on market conditions and agreements between the parties.
Requesting Seller Credit for Closing Costs:
Buyers can request that the seller provide a credit toward closing costs as part of the negotiation process. This credit can help offset expenses such as escrow fees, title insurance, or even commissions, and lastly pre-paids like property taxes and homeowners insurance. Seller credits are typically agreed upon at the time you write your offer but can also be negotiated in contract if the seller is willing to amend the contract. This can be be an effective way to make home buying more affordable, especially in competitive markets. However it can also be a setback to your offer in competitive markets so as your agent I would help you find the right opportunities for this kind of strategy.
Home Inspections (in addition to closing costs): Home inspections are typically around $800 and cover the five major systems of the home: electrical, plumbing, HVAC, roofing, and foundation/structural/drainage. Roof inspections usually cost between $250 and $350, while termite inspections are also in the $250 to $350 range. While the home inspection provides a comprehensive overview with a narrative description of the defects of the home, if any issue is pointed out and you want more information you'll want to hire a specialist, such as HVAC technician or a plumber, to provide detailed bids and repair quotes.
City-Specific Fees and Requirements (in addition to closing costs): Some cities in the East Bay have unique point-of-sale ordinances that can add costs or obligations during the home buying process.
Point of Sale Ordinances in East Bay Cities
Each city in the East Bay has its own requirements that can impact both buyers and sellers. Here are the differences in point-of-sale ordinances for Oakland, Berkeley, Alameda, and Emeryville:
Oakland
Sewer Lateral Compliance (not part of closing costs): Sellers must obtain a sewer lateral compliance certificate, ensuring the property’s sewer line is inspected and, if necessary, repaired or replaced. This work can be deferred to the buyer if agreed to in the contract. If this is something the seller wishes to do, it will say so in the MLS confidential remarks or in the disclosure package under the "(City) Purchase Agreement Addendum". East Bay MUD, the water utility provider, requires a $4,500 deposit to be placed in escrow until the work is completed in the event of a deferral. After the close of escrow, the buyer has 180 days to complete the work and obtain compliance. The repair cost can range from $3,000 and $7,000 but can even be much higher to 10k or even 20k so always check and confirm you have a copy of the sewer inspection and bid before writing your offer because every home is different.
Sidewalk Compliance (not part of closing costs): Sellers are required to inspect and repair unsafe sidewalks before close of escrow. This includes sidewalks, walkways, driveways, curbs, and gutters. Costs for sidewalk compliance typically range from $2,000 to $5,000 depending on the scope of work. They can actually be less, in the hundreds and the cost to defer that work is a $150 time extension fee filed with the City of Oakland.
Transfer Tax (part of closing costs): Oakland has a tiered transfer tax system, with rates increasing based on the property’s sale price. Transfer taxes are generally around $15 per $1,000 of the sale price and higher for properties above $2 million. City Transfer taxes are normally split 50/50 between buyer and seller and County Transfer Taxes are normally paid by the seller in Alameda and Contra Costa County.
Berkeley
Sewer Lateral Compliance (not part of closing costs): Similar to Oakland, Berkeley requires a sewer lateral inspection and compliance certificate, with average costs between $3,000 and $7,000 for the cost of repairs but can be higher around 10k or even 20k so always check and confirm you have a copy of the sewer inspection and bid before writing your offer because every home is different.
Transfer Tax (part of closing costs): Berkeley has a fixed transfer tax rate of 1.5% for properties valued at $1.8 million or less, increasing to $25 per $1,000 for properties over $1.8 million. Transfer taxes are normally split 50/50 between buyer and seller.
Building Energy Savings Ordinance (BESO) (not part of closing costs): Sellers must provide an energy assessment report, costing around $300 to $600.
Seismic Transfer Tax Rebate (n/a): Eligible seismic retrofitting can qualify for rebates, but costs depend on the scope of work and necessary engineering, typically starting around $5,000 and up and upgrades are completed within one year of the sale,
Alameda
Sewer Lateral Compliance: Alameda also enforces sewer lateral compliance, requiring inspections and necessary repairs with typical costs between $4,000 and $6,000.
Transfer Tax (part of closing costs): Alameda has a flat transfer tax rate of $12 per $1,000 of the sale price. Transfer taxes are normally split 50/50 between buyer and seller.
Emeryville
Sewer Lateral Compliance: Like other cities, Emeryville requires sewer lateral compliance. Costs generally range from $3,000 to $6,000.
Transfer Tax: Emeryville has a fixed transfer tax rate of 0.25% of the sale price, making it more affordable compared to neighboring cities. Transfer taxes are normally split 50/50 between buyer and seller.
California
Energy/Water Efficiency Upgrades (not enforced but required during ownership): Installing low-flow toilets and showerheads to meet water conservation standards, with costs ranging from $200 to $1,000 depending on the upgrades needed.
Smoke and Carbon Monoxide Detectors (required at time of appraisal): Ensuring the installation of functional smoke detectors and carbon monoxide alarms throughout the property.
Water Heater Strapping and Bracing (required at time of appraisal): Securing water heaters to prevent movement during earthquakes, a mandatory safety measure in seismic zones.
Bars on Windows (required at time of appraisal): Releasing or removing security bars on windows if they impede emergency escape routes.
Pool Safety Requirements (required at time of appraisal): Properties with pools or spas must comply with California law by installing at least two of the seven approved safety features, such as fencing, pool covers, or alarms, to reduce dr
Additional Considerations
In Alameda County, it is common for buyers to pay their own escrow charges and title fees. Different counties have different practices so I can speak to this when it comes time to write your offer.
Finally, it’s important to note that all of these costs and responsibilities are negotiable between buyers and sellers. In some markets, there are common practices about who typically covers these expenses. Consulting with an experienced East Bay Realtor can provide clarity and help navigate these negotiations effectively.
Ready to Buy in 2025? Let's Talk!
If you’re considering buying a home in 2025, now is the time to take action! With changing markets and unique opportunities in the East Bay, having the right guidance can make all the difference. Contact me today to explore your options, get pre-approved, and find the perfect home that meets your needs and goals. Let’s turn your homeownership dreams into reality this year!
Moya Robinson REALTOR®️| COMPASS | DRE#01776635
510-575-0629 (call/text)
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