What buying a home in Monterey County really costs

Last checked: September 2026. Costs vary a lot from home to home and loan to loan. Your lender's Loan Estimate and your escrow officer's estimate are what count for your purchase.

The price of the house is only part of what you'll pay. This chapter covers the money you'll need to close, and the costs that come with owning a home here after you move in.

The cash you'll need to close

The money you bring to closing usually comes in three parts:

• Your deposit. Often around 3% of the price here, as covered in Chapter 8. It goes to escrow within a few days of your offer being accepted and counts toward your down payment.
• The rest of your down payment. Anywhere from 0% to 20% or more of the price, depending on your loan. Chapter 4 covers the options.
• Your closing costs. The fees for the loan, escrow, title, and other services, plus some prepaid expenses.

Some costs also come up before closing, like your inspections and appraisal, which you usually pay for as they happen.

Closing costs

Buyers' closing costs often add up to a few percent of the purchase price, on top of the down payment. The biggest pieces are usually tied to your loan. Common costs include:

• Loan fees. Origination fees, and points if you choose to pay them for a lower rate.
• The appraisal. It commonly runs around $500 to $700, and more for larger or more complex homes. You usually pay for it before closing.
• Escrow fees.
• The lender's title insurance policy, which protects your lender.
• Recording and notary fees.
• Prepaid items. Your first year of homeowners insurance, some property taxes, and interest from closing to the end of the month.
• An initial deposit into your impound account, if your loan has one. That's the account your lender uses to pay your property taxes and insurance for you.
• HOA transfer fees, if the home is in a homeowners association.

Your lender gives you a Loan Estimate when you apply, which lays out most of these. A few days before closing, you'll get a Closing Disclosure with the final numbers. Compare the two and ask about anything that changed.

Who usually pays what here

Some costs are split between buyer and seller by local custom. In Monterey County:

• Escrow fees are usually split between buyer and seller.
• The owner's title insurance policy, which protects you as the new owner, is usually paid by the seller.
• The county transfer tax is usually paid by the seller. It's $1.10 per $1,000 of the price. None of the cities in Monterey County add their own transfer tax on top of it.

These are customs, not rules. Who pays for what is set in your purchase contract, and it can be negotiated.

Property taxes

Property taxes in California work differently than in a lot of other states, thanks to Proposition 13.

How it works. When you buy, your home's assessed value, the value the county taxes, is generally reset to the purchase price. The base tax rate is 1% of that value. After that, the assessed value can only go up by up to 2% a year while you own the home. The main exceptions are new construction, like an addition, and cases where the county had temporarily lowered the value and later restores it.

Plus local charges. Your actual tax bill is usually more than 1%, because it also includes voter-approved bonds and local special assessments, like school or park district taxes. The total depends on exactly where the home is.

The 2% limit is on your assessed value, not your whole bill. If you look up tax records, you'll often see a bill go up more than 2% in a year. That's usually because the bonds and assessments added on top can change from year to year. A huge jump in one year usually means the home sold and was reassessed at the new price.

Because the total varies so much by property, the most reliable number is the home's actual tax bill. Your agent or escrow officer can look it up, and your lender will estimate your taxes based on the price you're paying.

The seller's tax bill isn't yours. If the seller bought years ago, their property taxes are probably based on a much lower value. Your taxes will be based on what you pay. Budget using the price, not the seller's bill.

The supplemental tax bill

This one surprises a lot of first-time buyers. After you buy, the county reassesses the home at its new value and sends you a separate supplemental tax bill for the difference between the old value and the new one, for the rest of the tax year.

Here's a simplified example. Say the seller's assessed value was $300,000, and you buy the home for $800,000. The difference is $500,000. At a 1% tax rate, that's $5,000 a year in additional tax. If you close in August, the county prorates it for the rest of the tax year, which it shows as about 92% of the year, so your supplemental bill would be roughly $4,600. Your real bill will also include local rates on top of the 1%, so it may be a bit higher.

It can arrive months after you close, and it's usually not paid through your impound account, so plan on paying it yourself. If you know it's coming, it's not a problem. If you don't, it can be a shock.

Special taxes like Mello-Roos

Some newer developments have extra special taxes on top of the regular property tax, often called Mello-Roos taxes. They pay for things like the roads, water lines, and parks built for that community.

East Garrison is a local example. According to the county supervisor for the area, its special district charges are based on the size of the home rather than its value, and they can add up to a significant part of the total tax bill. Part of that charge is set to end after the construction bonds are paid off, and part continues to fund ongoing maintenance.

Not every newer community has Mello-Roos taxes, and some older areas have their own special assessments. The simplest way to know is to check the property's tax bill for any special taxes or assessments.

The costs of owning

Your monthly mortgage payment usually includes more than the loan itself. Lenders call it PITI: principal, interest, taxes, and insurance.

• Principal and interest on your loan.
• Property taxes, including any special taxes, usually collected monthly through your impound account.
• Homeowners insurance, also usually collected through your impound account. It can vary a lot here, and some homes need a FAIR Plan policy plus a second policy, as covered in Chapter 7.
• Mortgage insurance, if your loan has it.

On top of your mortgage payment, plan for:

• HOA dues, if the home is in an association. You usually pay these to the association, not through your mortgage, but lenders still count them when figuring out how much you can afford. Ask for the association's budget and reserves too, since low reserves can mean special assessments later.
• Utilities. Water, sewer, trash, power, and gas. Ask the seller for recent bills if you can.
• Maintenance and repairs. Older homes especially need regular upkeep, and things like roofs, water heaters, and sewer lines eventually need replacing. Set money aside each month so repairs don't catch you off guard.

Keep a cushion

Try not to spend every dollar you have on the down payment and closing costs. Moving costs money, new homes usually need a few things right away, and your first supplemental tax bill may be on its way. Some lenders also require you to have a certain amount left in savings after closing.

Where to focus your own research

• Before you look at homes: Ask your lender for an estimate of your cash to close and your full monthly payment, including taxes and insurance, at the prices you're considering.
• For each home you're serious about: Check the tax bill for special taxes or assessments, and check HOA dues if there are any.
• Before you close: Compare your Closing Disclosure to your Loan Estimate, and plan for the supplemental tax bill.

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This is general information, not tax, legal, or financial advice. Costs vary by property, loan, and transaction. Talk to your lender, escrow officer, and a tax professional about your situation. I'm a real estate agent, not a tax advisor or lender.