What Are You REALLY Paying For? The True Costs of Real Estate Transactions

When you think about buying or selling a home, the first thing that comes to mind is usually the price tag on the property. But the real estate journey involves a lot more than just that headline number. Let’s pull back the curtain and explore what you’re really paying for—whether you’re on the buying or selling side.

For Buyers: More Than Just the Purchase Price 

• Down Payment: This is the big upfront cost, typically ranging from 5% to 20% of the home’s price.
• Closing Costs: These can add up to 2-5% of the purchase price and include loan origination fees, title insurance, escrow fees, and more.
• Home Inspection & Appraisal: Essential for peace of mind and required by most lenders, these can cost several hundred dollars each.
• Moving Expenses: Don’t forget the cost of hiring movers or renting a truck, plus utility setup and any immediate repairs or upgrades.
• Ongoing Costs: Property taxes, homeowner’s insurance, HOA fees, and regular maintenance all add up over time.

For Sellers: It’s Not All Profit!

• Agent Commissions: Typically 5-6% of the sale price, split between the buyer’s and seller’s agents.
• Repairs and Improvements: Prepping your home for sale often means investing in repairs, painting, or staging to attract buyers.
• Closing Costs: Sellers also pay a share of closing costs, which might include title insurance, escrow fees, and transfer taxes.
• Mortgage Payoff: If you still owe on your mortgage, the balance will be paid out of the sale proceeds.
• Moving Expenses: Just like buyers, sellers need to budget for the cost of moving out.

The Hidden Value: What You Gain

While these costs can add up, it’s important to remember what you’re getting in return: a place to call home, an investment in your future, or a fresh start in a new location. Working with a knowledgeable real estate agent can help you navigate these expenses and avoid surprises along the way.

Understanding the true costs empowers you to make confident, informed decisions—so you can focus on what matters most: your next chapter.