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Costs associated with selling and buying
DH and I would like to create a new budget with our LO on the way and hoping to sell and buy our home within the next 1-2 years. I want to know all of the costs associated with selling and buying so we can create this budget. Unfortunately, we are going to have to bring $ to closing in order to sell our home because we are underwater. We are thinking we will have to bring about 20k. We also have 6-8 months expenses saved as well (which we have more than right now). We are going to try to sell by owner at first (my mom has done this before and will help us with the process) but know we may need a realtor at some point to help.
To sell I know we need:
*Money to bring to closing for the difference of money owed on mortgage & sell price
*Possible realtor fees (how much are these-- I know if varies from location to location but can anyone give me some sort of figure? )
To buy I know we need:
* Down payment (possibly do another FHA)
* Closing Costs (approximately what percentage are these of the purchase price? )
What else am I forgetting? Also, if I am not using a realtor at first to sell our home, how will I go about finding a realtor to buy another home? And will I have to pay this realtor or how does that work? We bought new construction this time around without a realtor so this is unfamiliar territority to me. Thanks!
Re: Costs associated with selling and buying
In Virginia the Seller is responsible for the Realtor fee's. So if you are buying you would look for a realtor by getting friends/family referrals. The person you choose you will not pay. Some agents specifically only deal with buyers while some deal with both.
Now Selling.. In VA the common commission is a total of 6%. Each Realtor (Buying and Selling) gets 3% of the purchase price. I know some realtors will make deals to lower the percentage. You may find someone to list your home for 2% or 2.5%. You generally don't want to try to lower the buyers agent commission. Remember if you are selling for sale by owner and you want realtors to bring people you will have to pay the 3% buyers agent commission unless you agree to a different deal with the agent.
Closing costs are up in the air. I think they usually run about 3-4% but don't quote me on this. If you do a conventional loan your down payment will usually be between 10 and 20%. Ours was 20% of the purchase price plus closing costs. FHA changes all of the time. Last I heard you could do a 3% down payment for FHA but someone else may want to add here too. I have not done a FHA loan myself. Don't forget to factor in any tax issues. Such as did you get a first time home buyers tax credit and if so do you need to pay back any by selling early? You may want to also factor in helping the buyer of your house with closing costs. It is very common for buyers to ask for closing help now.
I hope this helps some!!!
Figure 7-8% of selling price for basic selling costs. THen add the $ you need to bring to the table if you are underwater.
Now add the buying costs - (about 5 % of selling price). Moving costs, start up costs, repair/renovation costs.
Don't forget to have a good emergency fund in place as well!