When buying land, it’s crucial to incorporate all its associated costs into your budget. However, beginner land investors usually ignore one of the most obvious categories of expenses: closing costs.
Understanding Closing Costs in New York State
Closing costs are a one-time charge or fees, in addition to the loan down payment, paid for documentation and recording, closing a real estate transaction on a property. The costs vary from state to state but the sole purpose is the same: to finalize the deal.
In New York, which is one of the most lucrative real estate markets in the US, closing costs can be particularly significant, averaging between 3% to 7% of the total land purchase price.
Different Types of Closing Costs
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Agent or Attorney Fees: In every deal, there is an agent or attorney who represents either the buyer or seller. The party represented typically pays the fee, although it’s common for it to be split between both parties.
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Financing Fees: Buyers who use borrowed funds from a bank or lender must pay financing fees at closing, which depend on the amount of the loan.
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Brokerage Commissions: Real estate agents negotiate and acquire land on behalf of buyers or sellers, for which the seller pays a fee at closing known as the Brokerage Commission.
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Title Search: Conducted by a title company, the title search confirms the land’s legal ownership and checks its public records. The cost is usually paid by the buyer at closing.
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Deed Preparation: This involves preparing documents that convey the rights and warranties of land from the seller to the buyer, typically paid for by the seller at closing.
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Mortgage Preparation: If the buyer relies on owner-financing, this fee includes preparing all documents related to the mortgage and is paid by the buyer at closing.
Selling Traditionally vs. Selling to Us
Traditionally, sellers are often responsible for covering the closing costs, including any outstanding back taxes owed on the property. However, at www.WeSellNewYorkLand.com, we offer a different approach. When you sell your land to us, we cover all closing costs, including any outstanding back taxes. This saves you money and streamlines the selling process, making it hassle-free and efficient.
Conclusion
Every real estate transaction is incomplete without paying closing costs. While these costs cannot be skipped, they can often be negotiated. By understanding the different types of closing costs and exploring alternative selling options like www.WeSellNewYorkLand.com, sellers can navigate the process more effectively and minimize their financial burden.
Contact us today to learn more about how you can sell your land with ease and without worrying about closing costs or outstanding back taxes.
