What you'll walk away with when you sell in Monterey County

Last checked: September 2026. Costs, commissions, and tax rules depend on your situation and change over time. Your escrow officer can give you exact closing figures, and a CPA or tax professional should look at your tax situation before you sell.

When you sell, the sale price is only part of the story. The number that matters most is what you walk away with once everything is paid. That's usually called your net proceeds.

This chapter walks through where the money goes, what sellers here usually pay, and the tax questions worth asking before you list.

Start with a net sheet

A net sheet is an estimate of what you'll walk away with at a given sale price. I bring one to our second meeting, along with the pricing analysis from Chapter 3, so you can see the price and the bottom line side by side. I build it with a title company's seller net sheet calculator, using your actual numbers wherever I can, like your most recent property tax payment and your loan balance.

A basic net sheet looks like this:

• Sale price
• Minus your loan payoff, including any second loan or home equity line
• Minus closing costs, like escrow, title, the county transfer tax, and local reports
• Minus commissions for both the listing agent and the buyer's agent
• Minus any credits you agree to, like a credit toward the buyer's closing costs or repairs
• Plus or minus property tax and HOA prorations
• Equals your estimated net proceeds

It's an estimate, not a promise. The final numbers come from escrow, and they can change with the final price, the closing date, and anything negotiated along the way. But it gives you a realistic picture early, before you make decisions based on a number you'll never see.

One thing a net sheet doesn't include is income tax on your gain, if any, because that depends on your whole tax situation. More on that below.

What sellers usually pay here

Who pays for what is partly set by local custom and partly by the contract. Here's how it usually works in Monterey County:

• Escrow fees. Split 50/50 between the buyer and seller, throughout the county.
• The owner's title insurance policy. Usually paid by the seller. It protects the buyer's ownership of the home.
• County transfer tax. Monterey County charges $1.10 for every $1,000 of the sale price, usually paid by the seller. On a $1,000,000 sale, that's $1,100. None of the cities in the county add their own transfer tax.
• Your loan payoff. Escrow requests a payoff statement from your lender, pays it off at closing, and records the release of the loan.
• Local reports and requirements. City inspection reports, sewer lateral inspections, and the water fixture upgrades on the Peninsula, as covered in Chapter 5.
• The Natural Hazard Disclosure report, plus any HOA documents the association charges for.
• Smaller items, like notary fees and recording fees.

All of this is negotiable. A buyer can ask you to cover some of their costs, and you can agree or not. Whatever is agreed ends up in the contract and on your final settlement statement.

Property tax and HOA prorations

Property taxes in California run on a July-to-June tax year and are paid in two installments. Escrow splits the year between you and the buyer based on the closing date. If you've already paid past your closing date, you get a credit. If you haven't paid up to it yet, the amount you owe comes out of your proceeds. HOA dues are handled the same way.

How commissions work

Commissions are always negotiable. There's no set rate, and they're agreed on between you and your listing agent in the listing agreement.

The rules around buyer's agent compensation changed in 2024. Offers of compensation to the buyer's agent can no longer be posted on the MLS, and buyers now sign an agreement with their own agent that spells out what that agent will be paid. When the buyer makes an offer, they usually ask the seller to pay that amount as part of the offer.

What hasn't changed is who usually pays. Sellers here still typically pay the commissions for both agents, the same as before. Every so often a seller doesn't want to, but most still do, and for good reason.

Most buyers are already stretching to cover their down payment and closing costs. Many simply can't pay their agent out of pocket on top of that, and it generally can't be rolled into their loan. If you won't pay the buyer's agent, a lot of buyers can't afford your home, even if they love it and can afford the price. That shrinks your pool of buyers, and fewer buyers usually means a longer time on the market and a lower price. "The buyer can pay their own agent" sounds reasonable, but it usually ends up costing the seller more than it saves.

We'll go through the options together, and whatever you decide will be in writing before the home goes on the market.

Taxes: questions to bring to your CPA

I'm not a tax advisor, and your taxes depend on a lot more than the sale of your home. But there are a few things every seller should know enough about to ask the right questions.

The home sale exclusion

If the home was your main home, you may be able to exclude up to $250,000 of the gain from federal tax, or up to $500,000 if you're married and file jointly. California follows the same rule. Generally, you need to have owned the home and lived in it as your main home for at least 2 of the last 5 years.

Your gain is roughly the sale price minus your costs of selling and your "basis." Your basis generally starts with what you paid, plus the cost of improvements over the years. A new roof, a remodel, or an addition can add to your basis and lower your gain, so it's worth pulling together receipts and records before you meet with your CPA.

A few things that come up often here:

• Long-time owners. Homes on the Peninsula that were bought decades ago may have gains well over the exclusion. If that's you, talk to your CPA before you list, not after you're in escrow.
• Selling before 2 years. You may still get a partial exclusion if you're moving for work, health, or certain other reasons.
• Military families. If you've been away on qualifying official duty, you may be able to suspend the 5-year period for up to 10 years. Ask your CPA whether that applies to you.

Second homes and rentals

If the home wasn't your main home, like a vacation home or a rental, the home sale exclusion generally doesn't apply, and the whole gain may be taxable.

If you've rented it out, a couple of other things can come into play. Depreciation you took, or could have taken, while it was a rental is usually taxed when you sell. And if the home was an investment property, you may be able to defer the tax by buying another investment property through a 1031 exchange. That has strict timelines and rules, and it has to be set up before you close. Talk to your CPA early, and to a 1031 exchange specialist, often called a qualified intermediary, who handles these exchanges every day. If you need someone to call, I'm happy to connect you with people I trust.

If you inherited the home, the tax rules are different. See Chapter 8.

California withholding

When you sell property in California, escrow is generally required to hold back 3 1/3% of the sale price and send it to the state as a prepayment toward your California taxes. On a $1,000,000 sale, that's about $33,300.

There are exemptions. The most common is that the home was your main home and qualifies for the home sale exclusion. Others include selling at a loss or selling for $100,000 or less. You'll fill out a form in escrow to claim any exemption.

If withholding does apply, it isn't an extra tax. It's credited toward what you owe when you file your California return. But it does come out of your proceeds at closing, so it's worth knowing about ahead of time, especially for second homes and rentals.

Sellers who live outside the U.S. may also have federal withholding at closing. If that's you, let your agent and escrow know early.

If you're 55 or older: Prop 19

In California, your property taxes are based on what you paid for the home, not what it's worth today. Long-time owners often have a much lower tax bill than a new buyer would, and that can make moving feel expensive.

Under Proposition 19, homeowners 55 and older can take their current property tax base with them to a new home anywhere in California, up to three times. The replacement home generally has to be bought within 2 years of selling the old one. If it costs more than the home you sold, part of the difference is added to your tax base. The same rules apply to homeowners who are severely disabled and to victims of a wildfire or other declared disaster.

You have to file a claim with the county assessor where the new home is. The rules on value and timing are specific, so check with the assessor before you buy. If you're planning to sell and buy at the same time, Chapter 9 covers how that works.

Where to focus your own research

• Before you list: Ask your agent for a net sheet at a few different prices.
• If you've owned for a long time, or it's not your main home: Talk to a CPA before you list. Bring your purchase paperwork and records of any improvements.
• If you're 55 or older and buying again: Look into Prop 19 with the county assessor.
• When you get your final settlement statement: Read it line by line, and ask about anything you don't recognize.

If you'd like to see a net sheet for your home, reach out. I'm happy to put one together.

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This is general information, not tax, legal, or financial advice. Tax rules depend on your situation and change over time. Talk to a CPA or tax professional before you sell. I'm a real estate agent, not a tax advisor.