Local home buying taxes and closing costs- Holy Cow! (Pittsburgh: insurance, condo)

[Bong477]

Also, its helpful mentally to think of the prepaid real estate taxes as what they are... prepaid real estate taxes rather than a closing cost. Effectively, its still cash you need at closing so it doesn't make finding the money any easier, but its not just wasted money in the same sense that basically everything else you bring to closing is.

[Bong477]

Originally Posted by Copanut

Bottom line, don't buy in the City.

The difference in transfer tax between the city and the county is "only" 1% for the buyer. Its still very high elsewhere in the county.

[CaptainPittsburgh]

Originally Posted by Copanut

Bottom line, don't buy in the City.

We have opposing bottom lines. Mine reads: it sucks to pay the higher costs associated with buying in the city limits, but not as much as it sucks to live in the suburbs, hahaha.

[ferraris]

Originally Posted by Bong477

It's 4% in the city and 2% in most of the county (with a couple exceptions that are higher). Its generally split even between the seller and buyer so you pay half.

6-7% is a rough estimate for closing costs including your prepaid property taxes HOWEVER some of your costs are fixed regardless of home price and some are (more or less) proportional to home price. This means if you are buying an inexpensive home, your costs as a percentage of the home price will be higher. At only 55k, you may very well pay 10% or so.

Yeah it sucks. Not much choice in the matter though.

I made the same complaint last year when we were shopping... Buyer closing costs in City of Pittsburgh

Thanks for linking to your old thread. It sounds like the closing costs that were presented to me are about right since I am looking at lower value homes. Like you mentioned, many of the line items were flat fees.

Originally Posted by Copanut

Bottom line, don't buy in the City.

This does make a narrow selection of suburbs more appealing to me. However a 1% decrease on the low value homes I'm looking at would only amount to a few hundred dollars. Easily made up for by gas costs and how much I value my time spent (not) commuting.

If I were in the high end market though, it would be a bigger deal.

Originally Posted by GeneW

Of course some people have found ways around the transfer tax.

Infuriating, but maybe I can convince the seller to maintain ownership of the stoop for the first 3 years and then buy him out!

Originally Posted by Bong477

Also, its helpful mentally to think of the prepaid real estate taxes as what they are... prepaid real estate taxes rather than a closing cost. Effectively, its still cash you need at closing so it doesn't make finding the money any easier, but its not just wasted money in the same sense that basically everything else you bring to closing is.

So say I close in June...the taxes for June - December are pre-paid at the time of closing? Or do you retroactively have to pay for January - June?

[Copanut]

Originally Posted by CaptainPittsburgh

We have opposing bottom lines. Mine reads: it sucks to pay the higher costs associated with buying in the city limits, but not as much as it sucks to live in the suburbs, hahaha.

Wow, so cutting edge.

[greg42]

Originally Posted by CaptainPittsburgh

We have opposing bottom lines. Mine reads: it sucks to pay the higher costs associated with buying in the city limits, but not as much as it sucks to live in the suburbs, hahaha.

LOL I don't know if I completely agree, certainly not in every scenario, but that's still pretty funny.

[greg42]

Originally Posted by ferrarisnowday

So say I close in June...the taxes for June - December are pre-paid at the time of closing? Or do you retroactively have to pay for January - June?

If you close in June, the seller has already paid taxes for January-December, so you have to reimburse the seller for the taxes from closing date (when you officially take ownership of the house) to the end of the year.

School tax is often on a July-June fiscal year or maybe August-July so that messes things up. I think the payment on mine doesn't go out of my escrow until August sometime. If you close in June, the sellers probably won't have paid the next school tax yet. BUT. You will instead have to prepay your escrow account to cover the upcoming tax bill. EDIT: And of course you still have to reimburse the seller a little bit, for whatever remainder of that fiscal year.

[BrianTH]

Originally Posted by Bong477

The difference in transfer tax between the city and the county is "only" 1% for the buyer. Its still very high elsewhere in the county.

Yep. For that matter, the first 1% is imposed by the state (I'm not sure how it works in other counties in terms of additional transfer taxes and how those all get split).

Generally, while none of these taxes are charming, as we have discussed before, issues like having a shorter and/or public transit commute can easily be more important, and of course so are actual price and the sort of lifestyle you want to have.

[rbeattie]

Originally Posted by h_curtis

The transfer taxes are split between buyer and seller. Your side will have the 2%. Yes, the taxes when transferring a home in the city limits are crazy high. Probably better to move to the burbs and pay 1% in most cases, unless you want to move to Penn Hills. If you were paying cash, you can shift the 2% and the real estate commission to your side of the costs and lower the transfer. I don't know if people will understand what I am talking about, but if you are paying cash you can PM me and I will explain how to save money. Sadly most people don't know what they are doing AND 99% of realtors don't have a clue either. It always amazed me people don't know how to structure cash deals.

I am interested in learning how to save money on cash deals. How can we connect?

[SteelCityRising]

Originally Posted by rbeattie

I am interested in learning how to save money on cash deals. How can we connect?

My guess would be offer him a good bottle of scotch.