Q & A Saturday – What are Closing Costs?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your housebuying a house, real estate investor questionsland lording questions,  local market questions and many others things are all fair game. 

Today’s question is “What are Closing Costs?

Closing Disclosure Image - What Are Real Estate Closing Costs?

In this video Shaun discusses the many transaction costs to buy and sell real estate.

Some of the main points covered in this video are:

1)      What “Closing Costs” are

2)      What are some of the costs associated with buying a house

3)      What are some of the costs associated with selling a house

4)      Ballpark range a seller can expect to pay in closing costs for a normal transaction

5)      Shaun forgetting it is already the 2nd weekend of the new year :) 

 

If you have never bought or sold a piece of real estate the costs associated with the transaction can be pretty jarring when you first see them.  When buying a place all the costs associated with your mortgage loan can add up to a lot and this is on top of your attorney fees and recording fees, and any other things people stick on there for you.  When selling, especially when using an agent (like the vast majority of transactions) the costs can seem ridiculously high.  Starting with those real estate commissions that can easily add up to 5-7% of the selling price of your house, while these fees are not set and can be negotiated this is a pretty typical range.  Beyond that there will be recording fees, attorney fees and usually some number of other garbage fees that people will charge you.  Aside from that it is very common to be asked to pay some closing costs for the buyer.  This can add 3-4% to your fees if you agree to do it.  Now often the buyer will pay a little higher price, but not always and sometimes if you do not agree they just will not have enough cash on hand to buy the house.  All told it is not odd to see a seller lose 8-12% of the sale price of the house to closing costs.  For an investor running their numbers it is tough as we need to account for both sides of the transaction while running our number.  Last week we talked about the true cost of rehabbing a house and various closing costs can add up to 15-20% of the final sale price in costs so this is not some incidental number that does not have to be accounted for.  This accounting did not even account for a typical situation where we offer to pay most, or all, of our sellers closing costs so there is little mystery about how much money they will make.

 

Do you want to sell a house with little or no closing costs?  Do you need to sell a house in Massachusetts or New Hampshire?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our  Facebook page or Twitter account.

 

Some useful resources:

–          Last week’s video on all the costs needed to Rehab a house.

–          All our articles/videos on Financing and Lease Options

–          If you want to sell a house in Massachusetts or in New Hampshire we can help.

 

 

 

 

(Image credit: Closing Disclosure Image via entitledirect.com)

 

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