The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: get shorty who wrote (7002)	11/21/2002 6:21:52 PM
From: MSI	Read Replies (2) of 306849

Transaction costs: at least 10% sell-side, not including the carry and new home purchase. The 20% includes worst-case -- such as the vacation/rental home I sold for my mother in WA recently, who couldn't use the 1031 exchange since she wanted cash, so she got hit with: a) 7% r.e. commission (btw an absolutely excellent agent worth every penny, who cleaned the place, hired workers to paint, inspected, got all kinds of things investigated and done since I wasn't up there) b) 1.5% excise tax for the state of WA (not all states have this) c) 1.5% escrow and title fees d) 2% carry (four months since it was felt it would sell better empty than rented) e) 7% cap gains (18% on the gain, adjusted to % of total price for this comparison) Total Seller cost: 19% and 5 months To accurately portray total costs you have to include buy-side costs, such as 2% or so new financing fees. All that's reduced accordingly if it's your primary residence, you're not in WA, FSBO, etc. But still, large trx costs for selling a home and buying another one are another curb on volatility and liquidity (in addition to the huge hassle of moving etc etc)

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