In LA multifamily, closing costs are split between buyer and seller by customary practice, with a few specific items that typically attach to one side. The seller usually pays broker commission, owner's title insurance, and the county portion of documentary transfer tax. The buyer usually pays lender fees, lender's title insurance, escrow fee split, and the city portion of transfer tax. Both sides pay their own attorney fees. All of this is negotiable and does get negotiated in specific transactions. The single biggest LA-specific wildcard is Measure ULA — the LA City transfer tax on sales above a threshold — which can shift the cost stack materially on larger deals.
Broker commission. Customary for the seller to pay all sides' brokerage. Rates negotiable.
Owner's title insurance. Customary seller cost in LA transactions. Protects the buyer against title defects.
County portion of documentary transfer tax. LA County imposes a transfer tax on sale transactions. Customarily seller-paid, though negotiable.
Prorations. Property taxes, rents, utilities prorated to the close date.
Specific local assessments. Any outstanding code enforcement fees, unpaid inspection fees, or similar that transfer with the property.
Measure ULA, where applicable. LA City imposes Measure ULA as an additional transfer tax on sales within the city above a specific threshold. The ordinance imposes the tax on the transfer; in practice, who ultimately bears the cost is negotiated as part of the overall deal economics. On large LA City sales, this is a substantial number.
Lender fees. Origination, underwriting, appraisal, lender-ordered reports. Buyer-paid.
Lender's title insurance. Protects the lender's interest. Buyer-paid.
Escrow fee. Typically split 50/50, though negotiable.
City portion of documentary transfer tax. Most LA-metro cities impose their own transfer tax split. Customarily buyer-paid in city portions.
Transfer tax on LA City transactions above Measure ULA threshold. The ordinance imposes the tax at the time of transfer, typically paid by the buyer at close though negotiated into the deal economics.
Due diligence costs. Physical inspection, environmental assessment, rent roll audit, any buyer-commissioned reports.
Every line item above is negotiable in specific transactions. Sellers wanting speed often concede on cost allocation; buyers wanting a specific deal often absorb costs customarily paid by the seller to secure the transaction. The most consequential negotiations in LA deals are typically around Measure ULA allocation (on LA City transactions above the threshold), specific title curative issues, and any pre-close capital repair obligations surfaced by buyer diligence.
Measure ULA. Sellers who model net proceeds against historical transaction cost norms sometimes miss Measure ULA entirely — it is relatively recent and its impact depends on the specific sale price and location. On a LA City sale above the threshold, Measure ULA can be a meaningful percentage of sale price paid at close, often borne partially or fully by the seller through negotiated price and cost allocation. Any seller contemplating a sale in LA City above the Measure ULA threshold should model the impact explicitly before setting pricing strategy.
List every expected closing cost by line item. Model seller-side versus buyer-side with the customary allocation. Apply Measure ULA if it applies. Add prorations. Subtract from expected sale price. What remains is the realistic net proceeds number. Sellers who do this exercise pre-listing price realistically. Sellers who do not sometimes experience an unpleasant surprise at close.
Request a free evaluation — including a closing cost and net proceeds model for your specific building →
Is Measure ULA the same as regular transfer tax?
No. Measure ULA is an additional transfer tax that applies to LA City sales above a specific threshold, on top of the standard county and city documentary transfer taxes. The thresholds and rates have been revised since Measure ULA's original 2023 enactment.
Do I pay broker commission if I sell off-market?
Broker commission structure is specific to the engagement agreement. Off-market sales still typically involve broker representation and associated fees, though the structure may differ from a public-listing engagement.
Who pays for environmental assessment?
Typically the buyer, as part of their diligence. Some sellers commission pre-listing assessments to surface issues before marketing.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
Thinking about selling? Get a no-obligation evaluation on your building.
Request Free Evaluation →