Sticker shock at the closing table can derail an otherwise great Manhattan Beach purchase. You work hard to line up your down payment, and then the final numbers show up higher than expected. You are not alone. Closing costs in a high-price coastal market can feel confusing, but once you understand the moving parts, you can plan with confidence. In this guide, you will learn what fees to expect, what is negotiable, and how to estimate your cash to close without surprises. Let’s dive in.
What closing costs cover
Closing costs are the one-time charges and required prepaids you pay at the end of escrow. They are separate from your down payment. Most buyers should plan for a total around 2% to 5% of the purchase price, depending on your loan, points, and property type. In Manhattan Beach, the same percentages can translate into larger dollar amounts because home prices are higher.
Two documents help you estimate early and verify before you sign:
- Loan Estimate: Your lender must provide this within three business days of your loan application. It outlines projected closing costs and cash to close.
- Closing Disclosure: You receive this at least three business days before you sign to close. It contains final figures. Compare it to your Loan Estimate and ask questions about any changes.
Typical buyer costs in Manhattan Beach
Escrow and closing agent fees
Escrow companies handle the funds, the documents, and the coordination between parties. In Southern California, buyers and sellers often split escrow fees, but this is negotiable. Because fees are tiered by purchase price, expect charges ranging from the hundreds to several thousand dollars on Manhattan Beach transactions.
Title insurance and title-related fees
If you are financing, your lender will require a lender’s title insurance policy. In California, the seller often pays for the owner’s title policy, but this can be negotiated. Title premiums follow published rate schedules and scale with price, so lender policy costs on multi-million-dollar loans can reach several thousand dollars. You may also see small fees for endorsements or additional title services, especially for condos or properties with special assessments.
Lender-originated costs
Your lender may charge an origination fee or points, plus underwriting, processing, credit, flood certification, and appraisal fees. Common ranges include:
- Origination or points: about 0.5% to 1% of the loan amount, but this varies.
- Appraisal: about $600 to $1,500 for standard homes in Los Angeles County. For complex or high-end properties, appraisals can run $1,500 to $3,000 or more.
- Credit report, underwriting, and processing: usually a few hundred dollars combined, plus a small fee for flood certification.
Choosing to pay points can raise your upfront costs but may lower your interest rate. Ask your lender to model break-even timelines.
Homeowner, flood, and earthquake insurance
Your lender will require proof of homeowner’s insurance before closing and may collect a prepaid portion of the annual premium at closing. Premiums are higher in absolute dollars for high-value coastal properties. Flood insurance is required if the home is in a designated flood zone or your lender deems it necessary. Earthquake insurance is not a lender requirement, but many buyers consider it in Southern California. Because replacement costs are high, earthquake premiums can be significant. Get quotes early so you can plan your budget.
Property taxes, supplemental bills, and assessments
California’s base property tax is roughly 1% of assessed value. Local parcel taxes and special assessments can increase the effective rate. At closing, you will pay your prorated share of the current tax cycle, and your lender may collect reserves if you set up an impound account. After you close, expect a supplemental tax bill if your new assessed value is higher than the seller’s. This is common and often catches buyers off guard.
HOA and condo resale fees
If you are buying a condo or townhome, budget for HOA-related charges. Buyers often pay for transfer, assumption, or initiation fees, plus the resale disclosure packet. These can range from about $200 to $500 or more, and some communities charge a capital contribution or move-in fee. Always review the HOA’s CC&Rs and the resale package to understand monthly dues, reserves, and any planned assessments.
Inspections and specialty reports
Most buyers order a general home inspection and a termite inspection. Each often runs $300 to $800. In Manhattan Beach and other coastal areas, you may also consider a sewer scope, roof inspection, or specialized structural or geotechnical reports. Specialized inspections can cost $500 to $3,000 depending on scope. Ask your agent which reports make sense for the property.
Recording, transfer tax, and government fees
Budget a few hundred dollars for county recording fees. Documentary transfer tax rules vary by county and city, and who pays is negotiated in the contract. Confirm Los Angeles County and City of Manhattan Beach practices with your escrow officer early so you know how these are handled in your deal.
How much to budget in Manhattan Beach
The rule of thumb for buyer closing costs is 2% to 5% of the purchase price, excluding your down payment. In a higher-price market, that translates to larger numbers:
- At $1,000,000: 2% is about $20,000, 3% is about $30,000, and 4% is about $40,000.
- At $3,000,000: 2% is about $60,000, 3% is about $90,000, and 4% is about $120,000.
- At $5,000,000: 2% is about $100,000, 3% is about $150,000, and 4% is about $200,000.
These examples include typical components such as lender fees, appraisal, title, escrow, recording, prepaid insurance, prorated taxes, inspections, and any HOA or condo-related resale fees if applicable. Your lender may also require 2 to 6 months of property tax and insurance reserves for an impound account, which raises your cash to close even though those funds are earmarked for future bills.
Who pays what and what is negotiable
California has common practices, but everything is negotiable in your purchase agreement. Sellers often pay for the owner’s title policy and may cover a portion of escrow. Buyers usually pay for the lender’s title policy, loan-related fees, appraisal, buyer’s share of escrow, recording charges, and prepaid items like insurance and impounds. In a competitive offer situation, buyers may agree to fewer seller credits. In a slower market, you can sometimes negotiate seller-paid closing costs or general credits that offset your expenses.
Local factors to watch in Manhattan Beach
- High purchase prices: Even standard percentage-based fees become large dollar amounts.
- Coastal property risk: Flood zones and seismic risk can affect insurance needs and premiums.
- HOA prevalence: Condo and townhome transactions are common, which adds resale packages, transfer fees, and possible capital contributions.
- Supplemental tax bills: Expect a separate bill after closing when the county reassesses your new purchase price.
- Parcel taxes and assessments: Review the preliminary title report and property tax bill for recurring charges that affect your monthly budget.
- Competitive offers: Earnest money deposits often run 1% to 3% of the price, sometimes higher. Stronger terms can improve your position but increase early cash needs.
How to estimate early and avoid surprises
- Get your Loan Estimate: Apply for your mortgage early to receive a full estimate within three business days. This is your baseline for costs and cash to close.
- Request fee quotes: Ask your escrow and title companies for good-faith estimates. Confirm who pays for owner’s title, transfer tax handling, HOA fees, and city-specific charges.
- Shop where allowed: Compare lenders on points and origination. Compare insurance providers for homeowner, flood, and earthquake coverage.
- Ask for a preliminary Closing Disclosure: As you near the finish line, review a draft so you can resolve discrepancies before the final three-day window.
- Plan for impounds: If your lender sets up an escrow account, expect several months of taxes and insurance collected upfront.
- Build a buffer: Set aside funds for inspections, repairs, moving, and a supplemental property tax bill after closing.
- Use contingencies wisely: Complete inspections and financing steps on time so you can make informed decisions before contingencies expire.
Buyer timeline and checklist
Before you write an offer
- Get pre-approved to understand loan terms and estimated closing costs.
- Ask the listing agent about HOA dues, transfer fees, and any known assessments.
- Discuss customary cost splits and negotiation strategy with your agent.
After your offer is accepted
- Apply for your loan to trigger the Loan Estimate timeline.
- Order a home inspection and termite inspection. Consider roof, sewer, or structural reports if relevant.
- Request the HOA resale package early and review CC&Rs, reserves, and meeting minutes.
- Obtain fee estimates from title and escrow and ask for an itemized breakdown.
- Gather insurance quotes for homeowner, flood if required, and earthquake.
Three days before closing
- Review your Closing Disclosure line by line. Compare to your Loan Estimate.
- Ask your lender and escrow officer to explain any differences.
- Confirm your final cash to close, wire instructions, and signing logistics.
FAQs
What are typical closing costs for buyers in Manhattan Beach?
- Buyers often pay about 2% to 5% of the purchase price in closing costs, excluding the down payment, with higher absolute dollar amounts due to local prices.
Which closing costs do buyers usually pay in California?
- Buyers typically pay lender-related fees, appraisal, the lender’s title policy, their share of escrow, recording, and prepaid insurance and taxes, though all items are negotiable.
What is a supplemental property tax bill in Los Angeles County?
- After your purchase, the county reassesses the property and may issue a separate bill for the difference between the prior assessed value and your new price.
Do I need flood or earthquake insurance in Manhattan Beach?
- Flood insurance is required if the property is in a designated flood zone or if the lender requires it; earthquake insurance is optional but commonly considered in Southern California.
How much are appraisal fees for higher-end homes in Los Angeles County?
- Standard appraisals often run $600 to $1,500, while complex or luxury properties can range from $1,500 to $3,000 or more.
Ready to map your closing costs to a specific property and loan plan? Reach out for a private, no-pressure consultation. Colin’s team will build a clean, itemized projection tailored to your goals and timeline. Contact Colin Aita to get started today.
