The real cost of buying and selling a home

Buying and selling a home will only happen a handful of times for most individuals. Even though this type of transaction only happens a few times, there are a lot of things to consider. An area that is not given a lot of attention when it comes to buying a house is the costs to do these type transactions. To provide you with the best summary of the costs of transacting real-estate, I have reached out to Melanie Fields owner of 20 West Realty.

Take it away Mel.

Thanks, Randall

My goal is to ensure there are limited surprises for my clients when it comes to buying or selling a home. My clients ask me all the time, “what are the costs to transact real-estate?” Below are the customary and typical costs when buying and selling a home in Georgia. The percentages below are to be viewed and considered as “estimated costs”.  Remember, in real-estate everything is negotiable.  

Cost of Selling Your Home (all percentages are based on the listing price of the property):

• 6% Commission – Sellers pay commission to both the listing and buyer agent brokerages; the 6% is split evenly between both brokerages
• 5% Closing Costs – While this is negotiable, it is common for a buyer to ask the seller to pay all or a portion of the closing costs
• 1% Transfer and other miscellaneous fees – Such as HOA letters and utility costs
• 1-2% Miscellaneous costs – Not at all required, but costs such as pre-sale inspection, home repairs, buyer/lender requested repairs, cleaning, home-warranty, landscaping, etc.
• If there is a current mortgage and/or liens on the property, the payoff amount of that mortgage and/or liens will automatically be a cost that should be factored into the equation

It is valuable and important to note that the above costs are always negotiable!  Some costs, like buyer/lender requested repairs or a home warranty, are requests that may or may not be a part of your transaction.  Overall, the cost to sell a home is +\- 10% of the purchase price. 

Next, we will cover the cost of purchasing a home. As mentioned above, all percentages are based on the listing price of the property.

Cost When Purchasing a Home: 

• 1% Earnest Money – This is one of those not always required, but typical and expected.  At closing, this money is calculated towards your purchase price and does not go towards the down-payment or closing costs
• 5% Closing Cost – This is very negotiable because it’s typical to request that the Seller contribute some if not all of this cost
• 3 – 5% Minimal Down-payment – It is usually the largest chunk of your out-of-pocket expense.  It is dependent on the type of loan product you qualify for and choose; such as FHA or Conventional loan.
• 1% Miscellaneous – this should be expected to cover costs like the appraisal, inspection, or HOA transfer letters

Just as with the cost of selling, it is valuable and important to note that all of the above costs are always negotiable!  In summary, the expected cost to buy a home is 6-10% of the purchase price.  

Please feel free to contact me with any questions and/or concerns about this or any other information regarding Real Estate.  Remember – You Have A Partner in all Things Real Estate with 20 West Realty!