The San Francisco Peninsula Real Estate Blog

In San Mateo County, it is “customary” for the buyers in a real estate transaction to pay for closing costs. (Note the word customary – like anything else in a transaction, this is indeed negotiable.)  But with a normal transaction, the majority of the fees that you’ll see when you close escrow are:

1. Escrow fees
2. Title insurance, and
3. Loan origination fees.

Assuming that you’re not pre-paying points on your loan, you can count on closing costs to amount to about 0.8% of the purchase price.  So if you’re buying a $1M home, you should have an additional ~$8,000 set aside to close escrow.  Again, this is a rough approximation, but it gives you an idea on the costs involved — first-time buyers are sometimes caught be surprised by this and have to scramble to close escrow.

Well, if you’re buying a home in the City of San Mateo, you need to be aware of an additional transfer tax that increases the 0.8% significantly.  The City of San Mateo levies a “City Transfer Tax” of $5.00 per every $1,000 of the sales price.  So the same $1M home would be levied an additional $5,000 of taxes at closing.  The good news?  Unless it’s agreed to otherwise, the buyer and the seller split the City Transfer Tax 50/50.  Regardless, $2,500 represents an increase of about 31% above our example $8,000 closing cost.

So while you’re scraping up enough change to buy that first home, be sure to keep an extra stash on the side to cover your closing costs.

Burlingame is viewed by some as one of the last bastions against the tide of bad news in the real estate market.  Like a few other highly sought-after communities on the Peninsula, Burlingame has resisted the downward pull of the real estate market for most of the year.   But no community is immune from such a prolonged slump, and Burlingame is no exception.   Here’s a quick summary of single family residence sales for the past quarter (July – September 2008) in Burlingame:

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Note that both the median and average prices, as well as the number of units sold, have all dropped by double-digit percentages from last year.  Comparing it to Q2′08, with the exception of eking out a small gain in unit sales, the same phenomenon occurred.   Here’s a graphical representation of the sales performance by quarter for the past two years.

Finally, in what’s probably the most telltale example of the paralyzed market we’re in right now, take a look at the year-to-year unit sales figures below.   Clearly, the economy has spooked sellers as well and it’s understandable why with prices dropping the way they are.