Are closing costs keeping you up at night? You’re not alone. As a first-time buyer in Daly City, it’s normal to wonder how much cash you’ll actually need beyond your down payment. The good news is you can plan ahead, negotiate smartly, and find ways to lower what you bring to the table. In this guide, you’ll learn what closing costs include, who typically pays what in San Mateo County, and practical strategies to reduce your cash to close. Let’s dive in.
What closing costs are and how much to expect
Closing costs are the fees, taxes, prepaid items, and lender charges required to finish your purchase. They are separate from your down payment. Typical buyer closing costs run about 2% to 5% of the purchase price, depending on your loan type, the provider fees, and any seller credits you negotiate.
In Daly City and across San Mateo County, prices are higher than the national average. That means the dollar amount of your closing costs can be larger even if the percentage is similar. Local items like documentary transfer taxes, Mello-Roos or special assessments, and HOA reserves for condos can also affect your total cash due at closing.
Your Daly City closing cost checklist
Here are the most common line items you may see, plus typical Bay Area ranges. Your actual amounts will depend on your lender, purchase price, and the property.
- Loan application and origination fees: Lender charges to process and underwrite your loan. Often 0.25% to 1.0% of the loan amount, or a flat fee.
- Discount points: Optional prepaid interest to lower your rate. One point equals 1% of the loan amount and reduces your rate by a set amount.
- Appraisal: Lender-required valuation. Typical Bay Area cost $500 to $1,200, depending on property type and complexity.
- Credit report and underwriting: Credit pull and loan underwriting or processing. Credit reports often $25 to $100. Underwriting may be part of origination or listed separately.
- Title search and title insurance: Title search verifies a clean title. Lender’s title insurance is usually required and commonly paid by the buyer in California. Premiums are one-time and scale with price, often hundreds to a few thousand dollars in higher-priced markets. An owner’s policy is optional but commonly purchased.
- Escrow or settlement fees: Escrow manages funds, documents, and recording. Often $1,000 to $3,000+, and fees are sometimes split by local custom.
- Recording fees and transfer taxes: Recording fees are modest, usually tens to a few hundred dollars. Transfer taxes, if applicable, can be several thousand based on price and jurisdiction. Always confirm current San Mateo County and city rules.
- Prepaid property taxes and prorations: Timing matters because California property taxes are typically paid in arrears. If the home is in a special tax district, you may see prorated or prepaid amounts at closing.
- Homeowners insurance: Lenders usually require paying the first year’s premium at closing. In the Bay Area this can be several hundred to a few thousand dollars, depending on coverage.
- Mortgage insurance: For conventional loans with less than 20% down, you may have PMI. FHA loans have an upfront mortgage insurance premium that can be paid at closing or financed.
- HOA fees and reserves: Condos or HOA properties may require the first month’s dues and a transfer or administration fee at closing.
- Inspections: General home inspection, pest/termite, roof, or specialized inspections are common. Typical costs $300 to $1,000+, depending on scope.
- Escrow holdbacks or reserves: If there are agreed repairs or outstanding items, funds may be held in escrow temporarily. These are case by case.
Who usually pays what in San Mateo County
Many costs are negotiable, and local customs influence who pays which items. In California, the purchase agreement outlines the allocation, and practices can vary by city and even by property. That said, here are common patterns seen in San Mateo County transactions:
- Sellers often pay real estate commissions, the owner’s title insurance policy in many cases, and county or city transfer taxes where applicable. This is negotiable.
- Buyers usually pay lender-related costs like origination and appraisal, the lender’s title insurance policy, recording fees for the deed of trust, and their requested inspections. Escrow fees are sometimes split but can be negotiated.
For a specific Daly City property, confirm the exact allocation and any local taxes or assessments by reviewing your purchase contract, checking with the escrow/title company, and consulting San Mateo County and Daly City offices for current rules.
Loan programs and seller concessions
Your loan type can change how much help you can receive from the seller and how your closing costs are structured.
- Conventional loans: Seller credits are allowed, with limits that vary by down payment. Typical limits range from about 3% to 9% of the purchase price.
- FHA loans: Sellers can contribute up to 6% toward your allowable closing costs, prepaid items, discount points, and certain repairs.
- VA loans: Sellers can pay specific fees that the buyer is not allowed to pay and may contribute within program rules. Buyers typically pay a VA funding fee unless exempt.
- USDA loans: Seller contributions are allowed within program guidelines.
- CalHFA and assistance programs: Some programs can help with down payment and closing costs for eligible first-time buyers in California. Rules vary by program and lender, so coordinate early.
Always confirm the allowable limits and documentation requirements with your lender before you rely on seller concessions.
Ways to lower your cash to close
If you are stretching to cover both the down payment and closing costs, you have options. Consider a mix of these strategies:
Negotiate seller concessions
- Ask the seller to pay certain buyer costs, like a title insurance premium, escrow fees, or transfer taxes if applicable. Your loan program sets a cap on how much the seller can contribute.
Use assistance programs
- Explore CalHFA and local county or nonprofit programs that can help with down payment or closing costs. Eligibility and allowed uses vary, so start early.
Roll some costs into the loan
- Certain fees or insurance premiums can be financed, which lowers your upfront cash. This increases your loan balance and long-term interest, so run the numbers.
Ask for lender credits
- You may accept a slightly higher interest rate in exchange for credits that cover part of your closing costs. Compare the long-term cost to the short-term savings.
Shop lenders and providers
- Compare Loan Estimates from multiple lenders. Fees, rates, and credits can vary. Title and escrow fees also differ by company, so ask for quotes and consider the seller’s preferred provider.
Time your closing date
- Closing near the end of the month can reduce prepaid interest. You may still have prorated taxes or HOA dues, so ask your lender and escrow to model the timeline.
Apply your earnest money
- Your deposit counts toward your cash to close. Confirm the credit on your Closing Disclosure.
Limit optional add-ons
- Skip non-required products at closing. An owner’s title policy is optional but commonly purchased; understand risks and consult professionals before declining.
Negotiate HOA-related fees
- For condos, ask the seller to cover HOA transfer or admin fees, or the first month’s dues.
Important note: Tactics that lower upfront cash can increase total interest or reduce flexibility later. Review your options with your lender and agent so the plan fits your budget and timeline.
What to expect before and on closing day
A smooth closing comes down to preparation and clear communication. Here’s a quick timeline and checklist.
Timeline highlights
- About 3 business days before closing: Your lender sends the Closing Disclosure. Review it carefully and compare it to your Loan Estimate.
- Day of closing: Bring valid ID, wire funds per escrow instructions, and sign documents as directed by the lender and escrow.
- After signing: Funds are transferred and documents are recorded. Keys are delivered per your purchase agreement.
Practical checklist
- Review the Closing Disclosure and ask about any differences from your Loan Estimate.
- Verify the exact amount to wire and confirm wiring instructions directly with the escrow/title company to avoid fraud.
- Provide your homeowners insurance binder showing the policy starts on the closing date.
- Confirm who pays what per the purchase agreement and escrow instructions. Verify your earnest money credit.
- If using assistance funds, confirm all documentation and disbursement timing with the lender and escrow.
A simple way to estimate your budget
To ballpark your cash needs, multiply the purchase price by 2% to 5% for closing costs, then add your down payment and subtract your earnest money deposit. For example, on a $1,000,000 purchase, closing costs might be roughly $20,000 to $50,000, not including the down payment. Your actual amount will depend on your loan program, negotiated credits, prepaid items, and local fees. Use your Loan Estimate and, later, your Closing Disclosure for precise numbers.
Local guidance that puts you first
Buying your first home in Daly City is a big step, and you deserve a clear, stress-reducing plan for your closing costs. With neighborhood-first insight, patient explanations, and strong negotiation, you can move forward confidently and protect your budget. When you are ready for tailored numbers and a strategy that fits your loan, timeline, and target homes, connect with a local team that puts education and care first.
If you want a step-by-step plan for your Daly City purchase, reach out to Bryan Cruz and Rey Ancheta. We’ll help you review your Closing Disclosure, model lender credits and timing, and coordinate with escrow so your closing feels calm and predictable.
FAQs
How much cash should a Daly City first-time buyer bring to closing?
- Your Closing Disclosure shows “Cash to Close,” which includes your down payment minus any deposit plus buyer closing costs and prepaids. In the Bay Area, that can range from several thousand to tens of thousands based on price, loan, and any seller credits.
Who typically pays transfer taxes and title insurance in San Mateo County?
- Customs vary, but sellers often pay the owner’s title policy and any transfer tax where applicable, while buyers typically pay lender-related costs and the lender’s title policy. Always confirm in the purchase agreement and with escrow.
Can a seller cover all of my closing costs?
- Sellers can pay many buyer costs within loan program limits. Conventional loans allow seller credits based on your down payment, FHA allows up to 6%, and VA has specific rules. Down payment is usually not covered by the seller.
What programs help with closing costs for Daly City buyers?
- CalHFA and some county or nonprofit programs may offer down payment or closing cost assistance for eligible first-time buyers. Rules and availability vary, so coordinate early with your lender and escrow.
What documents will show my final closing costs?
- You receive a Loan Estimate within 3 business days of application and a Closing Disclosure at least 3 business days before closing. Compare them and ask your lender to explain any changes.
