I am trying to breakdown all transactional costs related to buying and selling a house as well as their numerical values. For instance, the agents get around 3% in commission each, the inspection costs around 500 dollars, etc, etc.
I have thought about these costs:
Feel free to add all the missing ones that come to your mind and an estimate of its respective costs or ratios.
The traditional agent commission is 6%, but this can frequently be less. For instance, in a very hot market with low inventory, the sellers agent doesn't have too much work to do and may agree to a 2% or less commission. For a buyer that does all of the research themselves, they may get a reduction in commission from their agent as well. Some agents will even work on a fixed rate instead of a commission.
Other closing costs include:
There may be other costs that arise which are negotiated between buyer and seller. For instance, a seller may require that the buyer allow them to live in the home for some period after the sale. The buyer may charge the seller rent for this period, which can be just deducted at closing. The buyer may also demand as conditions to the sale that the seller repair certain things, such as code violations. The buyer/seller may negotiate other property as part of the sale such as appliances, furniture, etc.
If the buyer enters into a contract and then withdraws for whatever reason before the purchase closes, depending on the specific contract, the buyer may be responsible for legal damages to the seller. Generally the contract will limit these damages to something like 3% of the sale price.
In the United states the amount need to close a real estate transaction does vary by state by state, and even within a state. Some are negotiable and some are set by law. Some can even vary within the month. Some are completely optional (points to buy down the interest rate). Fees can even depend on the source of the money.
The cost of the inspector will vary by the size of the house. An inspection of a one bedroom condo is cheaper than an inspection of a mansion.
In a buyers market some sellers may be willing to cover part of the closing costs to smooth the transaction, there was even a time when it wasn't unusual for some of the closing costs can be rolled into the loan. Of course when the seller pays closing costs, the costs have been rolled into the cost of the house.
The best place to get these answered is to find a real estate agent, they know the local market. Also start looking for a lender, they can explain all the loan options. There are federal truth in lending laws that require that you be given all these numbers long before you are committed to a house.
Keep in mind all these fees are in addition to the down payment for the lender, and how much you put down will also influence if you need mortgage insurance.
In Australia:
When Buying:
You can save on some of these if you learn to do them yourself (worthwhile doing if you plan to buy/sell many properties), including conveyancing and building/pest inspections.
When Selling
Once again you may be able to save on some of these if you learn to do them yourself, including conveyancing and selling the property yourself instead of going through a real estate agent (note: these DIY options are available in Australia but I don't know if they are available elsewhere).
