While there are many benefits to a cash sale, one of the main draws is the fact that it’s cheaper than a traditional sale. There are fewer closing costs, but that doesn’t mean there are none. You still have a few expenses to keep in mind.
Taxes
One thing you need to be aware of is the local tax laws in your area. They vary by state, so you must know how you’ll be personally affected. There are a couple of taxes you may need to pay. First, is the transfer tax which is paid anytime property is transferred. The cost of the tax will depend on state laws. In some cases, you may also need to prorate the property taxes of the home. Of course, you must also maintain paying your property taxes up until the sale has been closed. Look up what other taxes you may be required to pay in your area.
Fees
There are a number of fees that come with selling a home. Not all fees will be included in all sales, so it depends on your circumstances. For example, some sales require you to pay an attorney fee but this does not apply if neither you nor the buyer uses an attorney. Some common fees include escrow fees, title search fees, title transfer fees, title insurance, notary fees, recording fees, and more. You might also need to pay HOA fees depending on the requirements of your Home Owners Association. Before going into closing, make sure you know what you’ll have to pay.
No Commissions
In a traditional home sale, the seller is responsible for paying the commissions of both real estate agents involved. A typical commission is about 6% of the sale price. This can be a pretty hefty fee. However, cash sales don’t typically involve real estate agents at all since you and the buyer work everything out yourselves. You won’t be responsible for any kind of commission, which significantly reduces your spending on closing costs.
While there are still some costs associated with a cash sale, they are not as expensive as a traditional sale. A cash sale can save you money and make the sale process much easier. If you’re looking for someone to buy your home, consider selling to a cash buyer.
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