Buying a home in Petaluma is exciting, but the line called “cash to close” can feel like a black box. You may be wondering what you will actually pay beyond your down payment, who pays which fees in Sonoma County, and how to lower those costs. You are not alone. In this guide, you will learn what closing costs include, local customs that affect who pays, real Petaluma examples by price point, and smart ways to reduce the cash you need at signing. Let’s dive in.
What closing costs include
Closing costs are the one-time fees and prepaids you pay at settlement, separate from your down payment. They typically include:
- Lender fees and loan charges, such as origination, underwriting, processing, and your credit report. Lenders must send a Loan Estimate within three business days of application that outlines these costs. You can learn how that estimate works from the Consumer Financial Protection Bureau’s guide to the Loan Estimate.
- Appraisal to confirm value for the lender. In Sonoma County, you often see a range of about $600 to $1,500 or more depending on complexity.
- Title and escrow services, including title search, title insurance policies, and the escrow fee for handling the closing.
- Government fees, such as recording fees and documentary transfer tax.
- Prepaids and impounds, including your first year of homeowners insurance, prepaid interest, and deposits into your lender’s impound account for property taxes and insurance.
A common national rule of thumb is about 2 to 5 percent of the purchase price in closing costs, not including your down payment. For a deeper overview of typical costs, see HUD’s homebuying resources and the CFPB’s Closing Disclosure explainer.
Who pays what in Petaluma
Customs in California and Sonoma County shape who usually pays each item, but your purchase contract controls the final answer. Here is the general pattern you will see most often in Petaluma:
- Buyer typically pays lender fees, the appraisal, the lender’s title policy, recording fees related to the mortgage, prepaid insurance, and impound deposits.
- Seller often pays the owner’s title insurance policy and the county documentary transfer tax. These items are negotiable, and local custom can vary.
- Escrow fees are commonly split or negotiated between buyer and seller.
Because customs can shift by neighborhood and market conditions, review the payment boxes on your contract and verify with your escrow officer.
Typical line-item ranges
Actual fees depend on property, price, loan type, and your provider choices. Use these rough Sonoma County ranges as a budgeting guide:
- Lender fees: vary by lender and loan. Your Loan Estimate will itemize these.
- Appraisal: about $600 to $1,500 or more for complex or rural properties.
- Title insurance: premiums follow regulated rate schedules and increase with price. Expect several hundred to a few thousand dollars depending on your purchase price.
- Escrow fee: commonly about $1,000 to $2,500 total for the transaction, often split between buyer and seller based on agreement.
- Recording fees: small fixed amounts to record the deed and mortgage.
- Transfer tax: typically a seller cost in many California transactions. Verify current Sonoma County and any city transfer tax with the Sonoma County Clerk-Recorder-Assessor.
- Prepaids and impounds: first-year homeowners insurance, prepaid interest, and tax or insurance impounds can add several hundred to several thousand dollars depending on timing and property tax amounts.
- HOA items: prorated dues and transfer or document fees vary by association and are negotiable.
- Inspections: pest, septic, well, and other inspections often run $200 to $1,000 or more and are commonly paid up front.
For title insurance background and rate structure, see the California Department of Insurance.
Cash to close: Petaluma examples
These illustrations use two scenarios for closing costs as a percent of price: 2.5 percent for an efficient, competitive setup and 4.0 percent for a more conservative estimate. Totals below exclude any seller or lender credits and include prepaids within the closing cost percentage.
Example A: $700,000 purchase
- Closing costs at 2.5 percent: about $17,500
- Closing costs at 4.0 percent: about $28,000
- Down payment example at 5 percent: $35,000
- Estimated total cash to close
- 2.5 percent case: $52,500
- 4.0 percent case: $63,000
Example B: $1,000,000 purchase
- Closing costs at 2.5 percent: about $25,000
- Closing costs at 4.0 percent: about $40,000
- Down payment example at 10 percent: $100,000
- Estimated total cash to close
- 2.5 percent case: $125,000
- 4.0 percent case: $140,000
Example C: $1,800,000 purchase
- Closing costs at 2.5 percent: about $45,000
- Closing costs at 4.0 percent: about $72,000
- Down payment example at 20 percent: $360,000
- Estimated total cash to close
- 2.5 percent case: $405,000
- 4.0 percent case: $432,000
These are planning tools to help you budget. Your lender’s Loan Estimate and the final Closing Disclosure will itemize actual figures for your property and program.
Ways to reduce cash to close
You have several levers to bring down the money due at signing. The right mix depends on your loan program, the market, and your goals.
- Seller credits. You can ask the seller to credit part of your closing costs in the purchase contract. FHA loans allow seller concessions up to 6 percent of the purchase price, subject to program rules. You can review the policy framework in HUD’s Handbook 4000.1. Conventional, VA, and USDA loans have their own limits, so confirm caps with your lender.
- Lender credits. Many lenders offer a credit toward closing costs in exchange for a slightly higher rate. This reduces cash now but raises your monthly payment. Your Loan Estimate can show side-by-side options.
- Rate buydowns. A temporary or permanent buydown can be funded by you or the seller, depending on program rules. If the seller pays, it may count toward the seller concession limit.
- Finance some costs. Some loan options let you roll specific costs into the loan amount or use a no-closing-cost structure paired with a higher rate. This changes your monthly payment and loan-to-value, so review the tradeoffs with your lender.
- Down payment assistance. State and local programs can help qualified buyers with down payment and sometimes closing costs. Check the CalHFA homebuyer programs and local housing agencies to see current offerings and income limits.
- Gifts and employer programs. Gift funds from family are permitted in many programs with documentation. Some employers or community groups also offer grants or assistance.
- Negotiate fee splits. You can ask the seller to cover specific items like HOA transfer fees or a larger share of the escrow fee.
- Shop providers. Compare loan quotes, title and escrow fees, and insurance. The CFPB encourages consumers to shop and use the Loan Estimate to compare total costs.
Timing: what is due at closing
Your Closing Disclosure will show a clear “Cash to Close” line with the exact amount you need to bring to signing. It includes:
- Down payment for your loan program.
- Closing costs and third-party fees.
- Prepaid interest from funding to your first payment.
- First-year homeowners insurance premium.
- Initial deposits for your impound account if your loan has one.
To understand how the final figures will look, review the CFPB’s step-by-step guide to the Closing Disclosure.
How to get precise numbers
For a specific Petaluma home, pull quotes and disclosures early so there are no surprises.
- Ask your lender for a Loan Estimate within three business days of application. The CFPB’s Loan Estimate overview explains each line.
- Request a preliminary escrow estimate from the title or escrow company for title insurance, escrow fees, and recording.
- Verify property taxes and parcel assessments. Sonoma County parcel taxes and special assessments can affect impound deposits. Check with the Sonoma County Treasurer-Tax Collector and your escrow officer for the current breakdown.
- Confirm transfer tax and recording practices with the Sonoma County Clerk-Recorder-Assessor.
Local notes for Petaluma buyers
- Market conditions matter. In a hot seller’s market, sellers are less likely to cover buyer costs. In a balanced market, you may have more room to negotiate credits or fee splits.
- Customs are not rules. While sellers often pay the owner’s title policy and transfer tax in many California transactions, this is not guaranteed. Your offer and counter will spell out who pays what.
- Title insurance is regulated. Premiums follow filed rate schedules in California, so focus your shopping on service, responsiveness, and escrow fees. For regulation background, see the California Department of Insurance.
Your next step
If you are planning a Petaluma purchase, the smartest move is to pair a strong preapproval with a local, itemized cost estimate. That way you know your real cash-to-close range before you write. If you want a custom worksheet, referrals to trusted local lenders and escrow teams, or help structuring credits within program limits, reach out to Apryl Lopez for a friendly, pressure-free game plan.
FAQs
How much should I budget for closing costs in Petaluma?
- A practical planning range is about 2.5 to 4 percent of the purchase price for closing costs, not including your down payment. Your Loan Estimate will narrow this to your loan and property.
Can the seller pay my closing costs in Petaluma?
- Yes, through a seller credit negotiated in the purchase contract. FHA allows up to 6 percent toward buyer costs, while conventional, VA, and USDA have different limits. Confirm exact caps with your lender.
Who pays title insurance and escrow in Sonoma County?
- It is common for sellers to pay the owner’s title policy and for buyers to pay the lender’s policy and their share of escrow. Escrow fees are often split, and all items are negotiable in the contract.
What prepaids are due at closing for Petaluma homes?
- Expect to fund your first year of homeowners insurance, prepaid interest from funding to your first payment, and initial deposits for your impound account if required by your loan.
How do transfer taxes affect my cash to close?
- Documentary transfer tax is typically a seller cost in many California deals, but it is negotiable and can vary. Verify practices and current amounts with the Sonoma County Clerk-Recorder-Assessor.
How can I get an exact cash-to-close number for a specific home?
- Ask your lender for a Loan Estimate, request an escrow estimate from the title company, and confirm property taxes and assessments with the Sonoma County Treasurer-Tax Collector. Your Closing Disclosure will finalize the total.
