Yes, There are Costs When You Buy or Sell
October 28, 2010
Sometimes buyers are shocked when they discover that the money that they have accumulated for their down payment, is not sufficient to purchase a home. There are always costs involved, even if you are fortunate to be able to purchase a home without needing to take out a loan. Some of these costs will be an escrow fee, a proration of the property taxes and recording fees. If the buyer is using financing to purchase the property there will be origination fees, appraisal fees, credit check fees and a lender's title policy. Then there will also be prepaid interest. There may be additional fees, but these are basic to each transaction. They can add up to another 2% to 4% of the purchase price.
For a buyer, it is possible to ask the seller to pay some of these buyer costs. If sellers still net out the amount of money they wanted, they may be willing to credit the buyer with some of these costs.
Sellers generally use a real estate agent to assist them in the sale of their property. The real estate commission will be the base charge, but sellers will also have escrow fees, title insurance fees, recording fees, and prorated taxes. If the seller has a loan, there will also be loan pay off charges and, since interest on loans is paid in arrears, there will be interest added to the loan balance. If a seller has not properly strapped the water heater or installed smoke detectors, the cost of these items will also be a costs that the seller will incur.
I usually figure that these additional charges to the seller will be 2%-3% plus the amount of the loan payoff.
These days, buying or selling a home is a complicated process and the various professionals involved to see that all the legal requirements are met do charge for their services.
Sometimes buyers are shocked when they discover that the money that they have accumulated for their down payment, is not sufficient to purchase a home. There are always costs involved, even if you are fortunate to be able to purchase a home without needing to take out a loan. Some of these costs will be an escrow fee, a proration of the property taxes and recording fees. If the buyer is using financing to purchase the property there will be origination fees, appraisal fees, credit check fees and a lender's title policy. Then there will also be prepaid interest. There may be additional fees, but these are basic to each transaction. They can add up to another 2% to 4% of the purchase price.
For a buyer, it is possible to ask the seller to pay some of these buyer costs. If sellers still net out the amount of money they wanted, they may be willing to credit the buyer with some of these costs.
Sellers generally use a real estate agent to assist them in the sale of their property. The real estate commission will be the base charge, but sellers will also have escrow fees, title insurance fees, recording fees, and prorated taxes. If the seller has a loan, there will also be loan pay off charges and, since interest on loans is paid in arrears, there will be interest added to the loan balance. If a seller has not properly strapped the water heater or installed smoke detectors, the cost of these items will also be a costs that the seller will incur.
I usually figure that these additional charges to the seller will be 2%-3% plus the amount of the loan payoff.
These days, buying or selling a home is a complicated process and the various professionals involved to see that all the legal requirements are met do charge for their services.
posted by shirley harry at 8:16 AM
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