Thursday, December 8, 2011

What does it cost to buy and sell...

Just a rough estimate and please tell me if you think I missed anything out..

Paid by Seller

Realtor fees - Varies and negotiable. Anywhere from 7% on the first 100K of sales price and then 2.5% on the rest ..down
Legal fees $600-1000

Paid by Buyer

Appraisal for mortgage (often the lender will pick this up) but even if you are buying with cash you should get one $750 +/-
Legal fees $600-1000
Property Transfer Tax 1% on the first 200K and 2% on the remainder.
Insurance for the property - Critically important and most lenders will insist on it.

I forgot the PTT in the example below and have rejigged the numbers to account for that and a more realistic cost of selling.

Taking the PTT and 2.5% selling costs into consideration the difference is $110K for the renter and $79K for the buyer. A substantial difference!