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I am considering buying a house to live in for cash from a distant family member (for sale by owner) in Allegheny County. What closing costs should I expect?
Transfer tax is usually 1% paid by seller and 1% paid by buyer unless you are buying a home in the city or Penn Hills. It doesn't matter if you are paying cash or not, unless there is some chattel that you can pull out of the sales price, like an expensive dinning room chandelier or other more expensive items. For the most part you want to keep the sales price as low as you can due to costs and future taxes being reflected on that price, but you don't want to play around too much. You don't need to carry homeowners insurance nor title insurance, but I don't know if you can find an attorney that would close without the title insurance, since they make money on it. Maybe you could ask for a reissue rate if you get lucky.
Depends on the time of year, you will have to reimburse the property taxes already paid by the seller for the upcoming year. With a mortgage you have to escrow some taxes as well so it amounts to about a year of prepaid taxes, but I guess you won't have to do that with a cash sale? On average taxes are 2-3% of home value, individual results vary significantly though. Correct me if I'm wrong with this.
Transfer tax will be 1% in most of the region, but 2% in the city.
You will probably still have to do title insurance which is 0.5% generally. Maybe you can avoid it?
With a mortgage you have to escrow some taxes as well so it amounts to about a year of prepaid taxes...
Actually you don't have to, unless the bank requires it. I have never had taxes taken out on any mortgage I carried. I don't believe the greedy banks should be holding any of my money.
Never avoid title insurance. Even with a cash sale.
I have been toying with the idea of my next purchase to tell them to stick that tittle insurance… well you can figure out the rest of that sentence. It is a scam. You know it and I know it. One big scam.
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