Closing Costs on Home Bought for Cash (appraisals, insurance, properties)

[beachmouse]

Originally Posted by olecapt

Ugh...has bugs and humidity. Never live anywhere they put mosquito nets over their swimming pools.

It's not for mosquitos. It's to keep the leaves and gators out of the pool....

Okay, I kind of get your point there.

[staywarm2]

Closing Cost if Buyer Pays Cash--Follow-up

I noticed that quite a few people seem interested in this subject, so here is a follow-up on my research.

It seems closing costs are not much cheaper if you pay cash. Of course, there are no points or other mortgage related charges.

BUT if you buy a house, it appears you will end up paying a lawyer one way or another. I wouldn't mind paying a lawyer if he/she represented only us, but there are various situations where the seller will be required to have a lawyer, such as the involvement of a relo company. However, since the attorney fees seem to be the buyer's responsibility (!!!) even in such a situation, we would have to pay even though he/she is representing the relo company. However, I understand that these days it is not uncommon for the buyer to request the seller to contribute their portion. I noticed when I reviewed our closing documents from 6 yrs. ago, that we paid all the lawyer fees, even though he also represented the bank and the seller. Seems unfair, but that's the was it is (was). I'm sure going to challenge that when next time. Some states/areas use a title company instead.

Also, I personally would want a survey, our own title insurance, probably an appraisal to make sure we weren't overpaying, termite and radon inspections, and home inspection. Then there is the property tax pro-rata, and if there is any type of swim/tennis or HOA involved, a pro-rata on that. We would have to pay the homeowners insurance.

We found the survey helpful because we learned that our back fence was about 10' inside our property line, thus giving the family behind us a large portion of our own yard. We since have had the fence moved to its proper position to avoid any future problems when we sell.

[keeshonder]

If you have a good agent, almost nothing. It all depends upon what you negotiate with the seller. There are transfer taxes, closing attorney's fees (which include title search, etc). Recommend owners title insurance. Home inspection, pest inspection and survey's might also be costs. When acting as a buyers agent, I usually get the seller to pay for some or all of these. Always on a cash deal.

[olecapt]

Originally Posted by staywarm2

Closing Cost if Buyer Pays Cash--Follow-up

I noticed that quite a few people seem interested in this subject, so here is a follow-up on my research.

It seems closing costs are not much cheaper if you pay cash. Of course, there are no points or other mortgage related charges.

That is of course they vast majority of the closing costs paid by most sellers. So your are dismissing the big cost as uninteresting.

BUT if you buy a house, it appears you will end up paying a lawyer one way or another. I wouldn't mind paying a lawyer if he/she represented only us, but there are various situations where the seller will be required to have a lawyer, such as the involvement of a relo company. However, since the attorney fees seem to be the buyer's responsibility (!!!) even in such a situation, we would have to pay even though he/she is representing the relo company. However, I understand that these days it is not uncommon for the buyer to request the seller to contribute their portion. I noticed when I reviewed our closing documents from 6 yrs. ago, that we paid all the lawyer fees, even though he also represented the bank and the seller. Seems unfair, but that's the was it is (was). I'm sure going to challenge that when next time. Some states/areas use a title company instead.

What does the contract say? This is not hard stuff. You don't want to pay the other sides costs...just say no. If it ain't in the contract you don't pay it.

Note that lawyers are an eastern custom that don't exist in the west...so they obviously are not required.

Also, I personally would want a survey, our own title insurance, probably an appraisal to make sure we weren't overpaying, termite and radon inspections, and home inspection. Then there is the property tax pro-rata, and if there is any type of swim/tennis or HOA involved, a pro-rata on that. We would have to pay the homeowners insurance.

Surveys are a localism. If the property lines are very old a survey may well be needed. Virtually all of the west goes for years without one. I have never seen a survey in the west.

Last thing you need is an appraisal if you know what you are doing. If you don't know what you are doing and your agent doesn't either...well then you need an appraisal. Which probably won't do much good.

In this part of the world the crucial Title policy is a seller cost.

Pro rata are not a closing cost. Nor is home owners insurance.

We found the survey helpful because we learned that our back fence was about 10' inside our property line, thus giving the family behind us a large portion of our own yard. We since have had the fence moved to its proper position to avoid any future problems when we sell.

Could have found the same with a tape measure. This is not rocket science. If you really have a meets and bounds property...maybe you need a survey. But newly subdivided in the last 60 years? I doubt it.

[staywarm2]

Originally Posted by olecapt

That is of course they vast majority of the closing costs paid by most sellers. So your are dismissing the big cost as uninteresting.



What does the contract say? This is not hard stuff. You don't want to pay the other sides costs...just say no. If it ain't in the contract you don't pay it.

Note that lawyers are an eastern custom that don't exist in the west...so they obviously are not required.




Surveys are a localism. If the property lines are very old a survey may well be needed. Virtually all of the west goes for years without one. I have never seen a survey in the west.

Last thing you need is an appraisal if you know what you are doing. If you don't know what you are doing and your agent doesn't either...well then you need an appraisal. Which probably won't do much good.

In this part of the world the crucial Title policy is a seller cost.

Pro rata are not a closing cost. Nor is home owners insurance.



Could have found the same with a tape measure. This is not rocket science. If you really have a meets and bounds property...maybe you need a survey. But newly subdivided in the last 60 years? I doubt it.

WRONG! The fence was NOT on the property line and this was a 14 yr. old house. Actually, another side of the fence was not on the line either and our agent had those homeowners sign a document noting that they were using our property. All this was found out when we had the survey completed.

Pro-rata are paid at closing in OUR part of the country. Don't know about the wild west... The insurance company demands homeowners insurance to be paid when the home is purchased, ideally when the contract is accepted. This may be paid before the closing, but it still is a cost involved in buying a home, even for cash.

Appraisal--some friends stipulated in their contract that the price of the home they were purchasing must at least meet the appraisal cost of the purchase price. It didn't, and the sellers had to lower the price. So sometimes an appraisal can be a very useful tool.

Our GA contract stipulates that the legal representative is paid for by the buyer. Of course, that can be changed, as I mentioned in my post.

Of course, everything is negotiable with a real estate contract. However, there are cities in the country where real estate is selling very well, and these items might not be so negotiable.

[staywarm2]

Originally Posted by olecapt

That is of course they vast majority of the closing costs paid by most sellers. So your are dismissing the big cost as uninteresting.

???

[keeshonder]

Originally Posted by olecapt

That is of course they vast majority of the closing costs paid by most sellers. So your are dismissing the big cost as uninteresting.



What does the contract say? This is not hard stuff. You don't want to pay the other sides costs...just say no. If it ain't in the contract you don't pay it.

Note that lawyers are an eastern custom that don't exist in the west...so they obviously are not required.








Could have found the same with a tape measure. This is not rocket science. If you really have a meets and bounds property...maybe you need a survey. But newly subdivided in the last 60 years? I doubt it.

That is just what gets people into trouble. Perhaps, if you have a recently platted property with well marked pins you might be able to do it with a tape measure. Its being cheap with one of the most expensive purchases that someone will make in their lives that ends up costing them so much more later on.

And lawyers are not a custom but a legal requirement in certain states. And, having bought and sold property in both the east and the west I can say that the attorney's fees have tended to be much lower than title company fees, for the same (and sometimes better) service.

[olecapt]

Originally Posted by keeshonder

That is just what gets people into trouble. Perhaps, if you have a recently platted property with well marked pins you might be able to do it with a tape measure. Its being cheap with one of the most expensive purchases that someone will make in their lives that ends up costing them so much more later on.

I have been doing RE in the west for something over 10 years now. In that period I have never seen anyone do a survey. In that period I have never heard of a buyer having trouble over a survey. So yes if you wish the ultimate you can have the deluxe Title policy with the full blown survey and pay another $1000 in closing costs. If money is no object it makes perfect sense. You can also hire a consulting engineer and put $2000 into your inspection.

We talking useful costs or how to spend the most money?

And lawyers are not a custom but a legal requirement in certain states. And, having bought and sold property in both the east and the west I can say that the attorney's fees have tended to be much lower than title company fees, for the same (and sometimes better) service.

Sure lawyers are a custom. We don't have them in the west. Therefore they provide no essential function. That you legislate your customs is too bad. Leave it to the consumer and see how long it exists.

Sorry but you know not of what you speak. I have done RE in both places and I assure you that lawyers cost more.

Title fees are irrelevant per se. It is escrow and the escrow fee that replaces the lawyer. I don't however assert the claim completely as escrow and title companies do play games with fees...if you add title and escrow they are virtually all the same but they vary as to how the fees divide.

[staywarm2]

Originally Posted by olecapt

I have been doing RE in the west for something over 10 years now. In that period I have never seen anyone do a survey. In that period I have never heard of a buyer having trouble over a survey. So yes if you wish the ultimate you can have the deluxe Title policy with the full blown survey and pay another $1000 in closing costs. If money is no object it makes perfect sense. You can also hire a consulting engineer and put $2000 into your inspection.

We talking useful costs or how to spend the most money?

My survey cost under $300. We bought personal title insurance (in addition to the obligatory title insurance the buyer pays for the bank). If there is a problem, the bank's title insurance only covers them, NOT the buyer. Worthwhile cost, in my opinion.

[rjrcm]

Originally Posted by staywarm2

My survey cost under $300. We bought personal title insurance (in addition to the obligatory title insurance the buyer pays for the bank). If there is a problem, the bank's title insurance only covers them, NOT the buyer. Worthwhile cost, in my opinion.

As Olecapt said, we typically don't do surveys in the west unless it's an unusual property where the boundaries are not clear. Our contract also has the seller buy owner's title insurance for the buyer (buyer pays for lender insurance).