Prices in the United States have increased in the past two years. Las Vegas, which has always been one of the most coveted areas, is no exception. In fact, according to studies, it is now becoming increasingly difficult to find affordable housing in LA. This means that it sure is a seller’s market and it is best to capitalize on this trend if you are sitting on a property, waiting to sell it off. Now is the time.
House prices have increased by approximately 31 percent. Currently, the average price for a single-unit home is not less than $435,000. If you are looking to sell a property it is important to know all the hidden costs associated with the closing of this deal. There are closing costs that are to be considered and they vary from state to state. Interestingly, these costs are not uniform and are subject to change depending on where the transaction is happening. Also, the costs are different for For Sale By Owner (FSBO) sellers from those who pay for a full-service real estate agent.
There are components in the closing costs which are flexible and open to negotiation between the seller, buyer, and an agent involved with the transaction.
Here is how closing costs in Las Vegas work.
What are closing costs
Closing costs are payments that both parties – sellers and buyers – need to make to complete the property sale. These charges are beyond the real estate agent commission and other upfront payments typically known to the buyer or seller. Approximately, adding closing costs to the entire transaction would cost the seller around 10 percent of the total amount. Which is a huge chunk. Even if we assume the total real estate commission to be around 6 percent for the seller, closing costs amount to an additional four percent. For buyers, it is a mortgage interest rate and other taxes which constitute their closing costs.
Here is how you can save up on closing costs and thus preventing your savings from taking a huge dent.
Seller closing cost
Seller closing cost is an estimate of how much will a seller shell out apart from the standard real estate agent fees and other obvious changes. It is important to calculate closing costs first before the deal is in its final stages to avoid paying unplanned and avoidable fees.
The closing costs differ from place to place but largely they entail real estate commission, recording and transfer fees, property taxes, owner’s title insurance, escrow fees, attorney fees, HOA fees, and attorney fees.
In some cases, buyers cover the sellers’ closing costs if agreed upon beforehand. But the catch here is that sellers pay the costs from their selling profits but buyers pay from their pocket which is extremely expensive. Hence, buyers don’t usually agree to this but there is a provision for this in rarest of rare cases.
Seller closing costs depend on local real estate taxation, Home Owners Association (HOA), closing services particular to the area of sale, and finally the purchase agreement decided on mutually between the buyer and seller.
Buyer closing cost
Buyer costs are the charges that the buyer incurs apart from the house sale amount. As a buyer, it is crucial to accurately calculate the closing cost because he has to pay from his pocket. Buyer closing costs entail loan-related fees which eat up to 5-6 percent of the total cost while buying the house. To raise that kind of money sometimes gets unaffordable and therefore it is essential to negotiate the closing costs beforehand.
Main buyer closing costs include origination fees, loan application fees, buying points on the mortgage to reduce the interest rate, home inspection fees made mandatory by the loan lender, credit report, survey fees, title insurance, and other miscellaneous taxes.
The key to reducing buyer closing costs is to shop for services, compare the charges and then make an informed decision. It is important to go for an experienced agent who understands all these aspects and helps in reducing the closing costs.
Closing cost calculator Las Vegas
Closing costs differ from area to area in Las Vegas, here is how a seller would have to pay on average. If your home is priced at $450,000, according to the calculations the seller will have to pay $28,200 as closing costs apart from the real estate agent commission. This cost includes a home warrantee fee, home inspection fee, and taxation, among other things.
For a buyer supposedly if the target home price is $450,000 then the closing cost amounts to one-time closing costs amounting to $6,199 in addition to the escrow and other expenses amounting to $3,964 leading to a cash settlement of $14,663 at the time of closing. This is assuming that the buyer has paid 1 percent of the home sale amount as a down payment.
Now, a buyer can very well use different modes to reduce this amount. If they sign up for a Flat Fee MLS service like Houzeo which offers a buyers’ rebate, they would straight up save $6,750.
Buyer closing costs could be reduced if all the expenses are reviewed properly before signing the final sale agreement. Services like Houzeo offer a closing cost worksheet that gives you a detailed report of all the origination costs, lender title insurance, etc.
Buying a house is becoming increasingly unaffordable due to limited listings and sky-rocketing rates. Selling a house comes with its own difficulties too. As the closing costs add up to the deal, cutting into the savings. It is hence prudent to calculate how much closing costs will be chargeable in the last leg of the deal.
Sellers’ total closing cost is up to 8-10 percent of their savings which is a lot. Buyers have to incur 5-6 percent of the total amount. There are different ways to save up on these costs. With the right knowledge about the closing cost calculator Las Vegas, this is easily manageable. Services like Houzeo help in giving a clear-cut idea about the closing costs in Las Vegas.