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This guide delves into selling a home in California, including a special focus on Los Angeles and Orange County. We provide information on California real estate laws, taxes, and the cost of selling a property. We also give tips on how to make the most money and reduce stress.
Sell a California Home FSBO vs. Hiring a Realtor
California realtor commissions on sold homes are usually 5-6%. It’s easy to do the math on a $500,000 home and think you can save $30,000 by selling your home yourself. Generally speaking, it’s never that simple.
FSBO transactions can make sense, but usually only for people who constantly flip houses. In other words, people with a long-term commitment to developing the realtor skill set.
If you find yourself moving about once every several years, like the average American, there’s a solid chance you will only succeed in losing money and wasting time.
In California, sellers who use an agent typically sell for 33% more than FSBO transactions. To be transparent, there are factors at play besides the realtor’s negotiation skills. Luxury properties don’t really do FSBO, skewing the statistics above.
But there are many factors that contribute to maximizing your profit:
- Experienced negotiation skills
- Deep understanding of current market trends
- Time spent on the housing market
- Strong marketing opportunities
- Knowing which improvements are necessary or optimal
Obviously, these skills amount to a full-time job. Especially in markets like Los Angeles or Orange County, where property values tend to be higher, realtors almost always make better financial sense.
Cost of Selling a California House
California is the second most expensive state for the overall cost of selling a house. (Hawaii is number one). That’s mostly because property values are higher, and the cost of selling is related to the sale price.
Expect to pay 7-9% of the sales price on realtor commissions (5-6%), closing costs (1%), and other costs (1%). The good news is that California is one of the least expensive states to sell a house in terms of percentage.
| Sale price | Realtor fees (5%) | Closing costs (2%) | Total cost |
|---|---|---|---|
| $500,000 | $25,000 | $10,000 | $35,000 |
| $750,000 | $37,250 | $15,000 | $52,250 |
| $1,000,000 | $50,000 | $20,000 | $70,000 |
| $1,250,000 | $62,500 | $25,000 | $104,500 |
Here you can get a deeper understanding of Orange County, California closing costs.
The above checklist for selling California properties provides the major steps you shouldn’t overlook. Its purpose is to create a streamlined selling process by organizing ahead of time.
Proper preparation is important because you do not want your home to sit on the market for more than 3 months.
Follow this link for a detailed room-by-room home selling checklist.
Selling Luxury Real Estate in Orange County
Especially for the luxury market, it makes far more sense to hire an experienced realtor. In August 2022, Los Angeles home prices were up 5.4% compared to last year, selling for a median price of $975K.
According to the NRA®, only 9 percent of Los Angeles homebuyers purchased homes priced over $500,000, even though the median price is almost double that. Obviously, the higher the listing price, the lower that percentage goes.
Those two facts combined show how imperative it is to hire a realtor to sell a luxury property in LA or Orange County. It’s necessary to tap into the relatively small pool of buyers.
Tips for Selling Your OC or LA Luxury Home
1. Find a realtor with plenty of experience selling luxury homes, powerful negotiation skills, and excellent connections.
Strong connections are especially important for selling uber-luxury properties. Often multi-million dollar properties don’t list publicly to protect the privacy of the buyer and potential seller. In these cases, agents often sell via a well-placed phone call.
For example, if one of the special features of your property is a small showroom to house luxury automobiles, the right agent will have a list of past clients and industry connections that have a collection of their own.
Beyond that, it’s a matter of excellent staging, drop-dead gorgeous real estate photography and videography, and sometimes even fantastic parties to create a stir. At the top tiers of luxury real estate, strong agents will have great event planning in their skill sets.
2. Choose the optimal time to list your property.
For Los Angeles and Orange County, there are fluctuations in the market concerning the months where homes sell for a higher percentage relative to other months.
As you can see from the graph below, Los Angeles houses sell for more between June and December. Because it usually takes 1-3 months from listing to closing, the optimal time to list is April to October.
A well-timed listing can increase the sale by 2-5%. Of course, this is no guarantee, only a smart strategy to follow if possible.
How Our Team Can Help
The Jacqueline Thompson Team stands out above the rest when providing luxury home sellers with a seamless and highly profitable experience.
“Jacqueline Thompson is the highest quality realtor one can find. Her overall knowledge, exposure, and expertise in the largest mid-area of Orange County is a very rare finding. She was able to sell our home in Shady Canyon for an extremely high price in 2007 when no one else could. She also sold us our home afterward for a very reasonable price for three times the house we had before. I would ONLY recommend Jacqueline Thompson as she is brilliant in her widespread, long-term practice.”
Contact us today to see how we can provide a similar experience for you.
FAQs for Selling California Homes
What disclosures are required when selling a house in California?
There are five disclosures necessary when selling your home:
- Transfer Disclosure Form (Includes information like the age of the roof and whether the property is connected to the public sewer system)
- Property Taxes
- Toxic Substances (Like asbestos)
- Deaths at the Property
- Water Heater Strap (Whether the water heater has been safely braced due to potential earthquake damage)
What are capital gains when selling a house in California?
Capital gains taxes in California do not differ from federal regulations. That means they function according to the standard capital gains tax brackets.
Importantly, you are exempt from this taxation if all of the following apply:
- Your gain from the sale was less than $250,000
- You have not used the exclusion in the last 2 years
- You owned and occupied the home for at least 2 years