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|
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.
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
When we decided to sell our home, we interviewed six agents. Once we met with Jacqueline, we felt very comfortable and at ease with her in-depth market knowledge, understanding of the specific buyer pool FOR Shady Canyon and her pulse on the market. She gave us information that the other agents did not know since they did not intimately work in Shady Canyon as Jacqueline does.
She was able to help professionally stage our home to attract qualified buyers, generate multiple offers, and ultimately negotiated the best price for us with an all-cash buyer and a quick close of escrow. Through her expert understanding of how to work with the buyers specific to Shady Canyon, she was able to expertly and creatively capture a buyer for our home. Even though it was a complex deal with many factors involved, Jacqueline tirelessly worked to ensure the escrow was successfully closed. She remained professional and steadfast to ensure our goals were met. In this transitional market, it is important to work with the best person when selling our home – we found the perfect collaborator in Jacqueline.
From the time we signed the Listing Agreement with Jacqueline, to the successful close of escrow, it was seamless! Jacqueline was always available, and we communicated directly with her throughout the process. We are grateful to Jacqueline and her work ethics!
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FAQs for Selling California Homes
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)
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