4 ms·

1.2% annual property taxes aren't out of the ordinary in the US (I pay ~1.5%), but having a sales tax (more or less) of 6% on homes is completely unheard of. C

1.2% annual property taxes aren't out of the ordinary in the US (I pay ~1.5%), but having a sales tax (more or less) of 6% on homes is completely unheard of. Closing (transaction) costs in the US are in the ~$5k range.

jackpirate 8y ago
Except that the seller typically pays around 10% (would be $40k for my house).
- strictnein 8y ago
  That's money towards the home itself though. The person I was responding to stated that it was a 6% tax, which is a very different thing.
  - jackpirate 8y ago
    That's not money towards the home. That's fees payed to brokers, the city, county, etc.
lisper 8y ago
The standard real estate brokerage fee in the U.S. is 6%. One also often pays "points" on the loan. A closing cost by any other name is still money that is in someone else's pocket when the dust settles.
- strictnein 8y ago
  There's real estate brokerage fees in Europe too. https://tranio.com/articles/real_estate_agents_commissions_in_various_countries/ https://tranio.com/articles/real_estate_agents_commissions_i... Also, if you're paying 6% in the US you're doing something wrong. Selling through Redfin, for instance, and you'll be around 4.2% (1.5% for Redfin, 2.7% for the buyer's realtor).
- bdhess 8y ago
  Brokerage fees cover the costs of a broker's involvement in the transaction (for the seller's broker, listing and marketing the property; for the buyer's broker, finding and showing properties; for both brokers, "event managing" the transaction toward resolution). Points on the loan is money paid to the bank in exchange for a reduction in the interest rate over the life of the loan. Both of those are different things than paying money to the government just for the privilege of consummating the transaction.
  - lisper 8y ago
    If I'm a seller, it doesn't matter to me one whit whether the money that I don't get ends up in the pocket of the bank or the broker or the government. I really don't care whether you call this lost money a tax or a commission or points. All I care about is that it's money that the seller was willing to pay that someone else gets to keep and not me.
    - bdhess 8y ago
      Commissions are negotiable (it is even possible to complete a real estate transaction without a broker; i.e. 0% commission). And sellers don't pay points.
bdhess 8y ago
> but having a sales tax (more or less) of 6% on homes is completely unheard of As with any tax, depends on where in the US. Per Wiki, it's 4% in Pittsburgh[0]. [0]https://en.wikipedia.org/wiki/Real_estate_transfer_tax https://en.wikipedia.org/wiki/Real_estate_transfer_tax
- strictnein 8y ago
  Wow. I had no idea. Learn something new every day.
joshuaheard 8y ago
In Washington state, we have a 1.2% excise tax on the sale of real property.

jackpirate 8y ago

Except that the seller typically pays around 10% (would be $40k for my house).

strictnein 8y ago
That's money towards the home itself though. The person I was responding to stated that it was a 6% tax, which is a very different thing.
- jackpirate 8y ago
  That's not money towards the home. That's fees payed to brokers, the city, county, etc.

lisper 8y ago

The standard real estate brokerage fee in the U.S. is 6%. One also often pays "points" on the loan. A closing cost by any other name is still money that is in someone else's pocket when the dust settles.

strictnein 8y ago
There's real estate brokerage fees in Europe too. https://tranio.com/articles/real_estate_agents_commissions_in_various_countries/ https://tranio.com/articles/real_estate_agents_commissions_i... Also, if you're paying 6% in the US you're doing something wrong. Selling through Redfin, for instance, and you'll be around 4.2% (1.5% for Redfin, 2.7% for the buyer's realtor).
bdhess 8y ago
Brokerage fees cover the costs of a broker's involvement in the transaction (for the seller's broker, listing and marketing the property; for the buyer's broker, finding and showing properties; for both brokers, "event managing" the transaction toward resolution). Points on the loan is money paid to the bank in exchange for a reduction in the interest rate over the life of the loan. Both of those are different things than paying money to the government just for the privilege of consummating the transaction.
- lisper 8y ago
  If I'm a seller, it doesn't matter to me one whit whether the money that I don't get ends up in the pocket of the bank or the broker or the government. I really don't care whether you call this lost money a tax or a commission or points. All I care about is that it's money that the seller was willing to pay that someone else gets to keep and not me.
  - bdhess 8y ago
    Commissions are negotiable (it is even possible to complete a real estate transaction without a broker; i.e. 0% commission). And sellers don't pay points.

bdhess 8y ago

> but having a sales tax (more or less) of 6% on homes is completely unheard of As with any tax, depends on where in the US. Per Wiki, it's 4% in Pittsburgh[0]. [0]https://en.wikipedia.org/wiki/Real_estate_transfer_tax https://en.wikipedia.org/wiki/Real_estate_transfer_tax

strictnein 8y ago
Wow. I had no idea. Learn something new every day.

joshuaheard 8y ago

In Washington state, we have a 1.2% excise tax on the sale of real property.