Real Estate Filter: What would it cost to sell our house and buy another house at the same price?

June 14, 2011 7:26 PM

Real Estate Filter: What would it cost to sell our house and buy another house at the same price?

The elements I imagine would add cost would be the following:

- real estate agent fees (3% for buying, 3% for selling)
- the cost to fix up our current house to prepare it for selling
- an inspection of a house we would purchase (a couple hundred dollars?)
- the physical move itself ($500-1000?)

What other costs would there be?

Can any of these fees be included in the mortgage so it is less out of pocket?

posted by kdern to health & fitness (11 answers total)

capital gains tax?
posted by elizardbits at 7:32 PM on June 14, 2011

Off the top of my head:

1. Closing costs on the new house. These can sometimes be rolled into your mortgage.

2. The work to make the new house liveable--painting, whatever minor repairs need to be done, cleaning supplies, and so on.

3. Miscellaneous. Last time we moved, for instance, we commented how surprising it was that, while we had owned enough lamps at the old house, for some reason it quickly became clear that we needed a couple of additional lamps at the new house. Or you'll find yourself deciding to just throw out the kind-of-crappy shower curtain and buy a fresh new one for the new place. This kind of thing can add up to hundreds of dollars before you're done.

4. Rubbish removal, either when you're cleaning out the old house or when you realize that you foolishly forgot to specify that the people you're buying from had to get all the junk out of the attic or basement. Another couple hundred, maybe.

5. New locks, or having the locks re-keyed at the new house.
posted by not that girl at 7:33 PM on June 14, 2011

physical move depends on how much you're moving, how far you're moving and how you're moving. The last part depends on if you're paying a crew or doing it yourself.

Generally, the answers you are going to get are going to be very vague as there are far far too many variables involved in the process.
posted by jerseygirl at 8:03 PM on June 14, 2011

Closing costs include title insurance, property taxes and city/county transfer fees. Mortgage costs can include origination fees, inspections, appraisal fees, points, documentation, wire transfers.

If both houses are in the same area, you might want to use the same realtor for both deals and negotiate a discount on the sale and/or help with closing costs on the purchase.
posted by shoesietart at 8:21 PM on June 14, 2011

Would you possibly own and owe (mortgage, taxes, insurance) on both houses at the same time? Shouldn't be an issue if you sell first then buy, or are able to buy then sell quickly. But if it the overlap stretches out you could find yourself making payments on both.

Owen
posted by rube goldberg at 9:38 PM on June 14, 2011

Remember you're going to have to get a bunch of utilities disconnected at the old place, and reconnected at the new place. Depending on if you're under any contracts or not (for stuff like cable, internet, etc.) you're probably going to get some hefty fees coming from those mongrels.
posted by tumid dahlia at 9:45 PM on June 14, 2011

With respect to rube goldbergs comment, if the opposite happens and you sell old place before buying new place, factor in hotel or rent of a third place and storage for your stuff in the interim. Plus a double move, more or less- cost to move stuff into storage, cost to move stuff out of storage into new place.
posted by slateyness at 12:34 AM on June 15, 2011

You'll be starting your mortgage over, which means more of each payment is interest and less is building equity in your home. The longer you've been in your current mortgage, the more this matters, because early payments are almost all interest and later ones are almost all equity. It's not a greater cost in terms of cash out of your pocket, but there's a big difference between putting that cash into the banker's pocket (interest) vs. putting it into another of your own pockets (equity) that you, at least theoretically, get back when you sell.
posted by daisyace at 4:43 AM on June 15, 2011

Depending on where you are possibly Stamp Duty on the new house.
posted by mary8nne at 5:08 AM on June 15, 2011

Seller pays the real estate commission, so you won't be paying commission on the new house. That said, 3% sounds low, it's typically around 5-6% around here (NY area).
posted by dabug at 8:01 AM on June 15, 2011

We went through the simultaneous selling/buying process last summer. Not fun at all, stressful, but worked out well in the end.

Agent fees would be ~5% to sell (market rate); in the scenario of buying using the same agent, the sell % could be negotiated much lower. We were able to get it down to below 4% (2.5% to the buyer's agent of the house we are selling, and a little more than 1% to the selling agent). Of course to buy there's no agent fees involved.

Inspection fees are relative to the size of the property and the location; in my area (Washington DC) it runs from $500-1000 and is well worth it.

Physical moving costs depend also on size and location; if it's a local move then $500 sounds low (although $1-2K may be reasonable)

Capital gains is not an issue if you've lived in your current place 2 out of the past 5 years. (Assuming US locale.)

Taxes will bite you though - either 'Stamp Duty' or other transfer taxes;as mentioned, in my area it is a tad under 1% of the sales price on the purchase side. Your local realtor should have the details on what that is for your area.

If you live in California, due to Prop 13 your RE taxes will go up due to the new cost basis that the taxes are calculated upon (strong incentive for people not to do what you proposed if you live in CA).

Anything could be rolled into a new mortgage assuming that you have the minimum for your financing (say 20%), especially as if your LTV ratio on your existing place is <<80%. You have equity to play with which will be money in your pocket (or money to spend on the moving costs etc., depending on how you look at it).
posted by scooterdog at 11:07 AM on June 15, 2011