Im trying to get used to analyzing deals and Im a little confused on how to estimate closing costs for potential flip deals. just closing costs, not holding or money costs. One scenario is if I buy a house from a motivated seller and then I rehab it and sell it. What fees am I going to have to pay in this scenario. I know its based on the sales price, im just looking for what the specific fees will be so I can look up the numbers.
Another scenario is if I buy a property from a wholesaler who wants me to pay all of the closing costs, what would those be based on the logic that in this case im paying both the buyers and sellers closing costs.
I have purchased a few houses and I have read a few books on flipping and wholesaling, Im just having trouble understanding what values to put in the calculators to determine my Maximum offer amount.
Look to see if any local title companies have a closing cost calculator on the website. Many will. That should give you a good idea. Local taxes will be one of the big things that impact the closing cost amount, but for easy calculation I estimate 3% on the buy side and 8% on the sell side.
This is area specific, but for me it is attorney fees, transfer tax, tax adjustments (county, school and village) title fee and title insurance on the buy side.
On the close side it is attorney, transfer tax, tax adjustments, and realtor fees.
My latest house ($120k purchase) cost about $8500 to buy and will cost around $11-12k to sell.
Originally posted by @Jarod Dudley :
@Jeremy Taylor hey Jeremy, it will vary state to state- but a good rule of thumb is 3-5% of purchase price for title taxes insurance etc
Where are you looking?
Southern California. Inland empire. All the calculators show closing costs, and I can estimate them based on the way I have purchased and sold in the past, what’s confusing me is how to know what I will be paying in the scenarios I posted above. When I’m essentially paying both sides at different times.
thanks for all the input everyone. Does anyone have a list or know where I can find what types of fees there are in general. I’m not so much looking for a cash number, I’m looking for a list of what sellers and buyers pay so I can calculate my own numbers. I don’t want to just put a number or percentage in there and be caught off guard when I get to closing.