What are Buying Costs?
Buying Costs are costs that you incur when you purchase a property. The bulk of your Buying Costs will be used to pay for Title Work to research the title, and attorney's fees to review the closing documents.
Otherwise, you may pay a few hundred dollars for a property inspection. If you are receiving financing, you will have additional costs as well, which we will discuss in the Financing Cost lesson.
What Are The Typical Buying Costs & Amounts I Can Expect To Pay Flipping Houses?
Typical Buying Costs
Here's a list of typical Buying Costs and average amounts that you will likely have on your rehab projects.
Title Work ($500 to $1,500)
- Title Search ($500) - A title search is performed by a Title Company to research the property records to ensure there is clean title, and no claims or liens on the property.
- Title Insurance ($250 to $500) - Once the title company verifies clean title they will guarantee the title with title insurance which protects the buying in the event someone makes a claim on the property in the future. Insurance can vary depending on the property value, property history & location among other factors.
- Closing Processing ($500) - Attorney fees pay for an attorney/title company to review the and process closing documents .
Inspection Costs ($300 to $500)
If you are just getting started, it's probably a good idea to pay for a professional inspector to perform a full property inspection to find any major issues or concerns.
Other Miscellaneous Closing Costs ($500 to $1k)
- Courier Fees ($50-$100) - Courier fees are fees to transport the closing documents .
- County recording fees ($50 - $100) - Recording fees are charged by the local county recording office to record the property documents in the public records.
- Miscellaneous Fees ($250 to $500) - There will also likely be miscellaneous processing fee/document preparation fees.
As a general rule of thumb, Buying Costs will be between $1 to $3k or approximately 1 to 3% of the Purchase Price.
