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.
Note: 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.
- Inspection costs ($350 - $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.
- Closing Costs (Generally amount to $1k to 2k)
- 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.
- Attorney Fees ($500) - Attorney fees pay for an attorney to review the closing documents .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 3% of the Purchase Price.
<span class="lesson-quote--tag blue">MENTAL NOTE</span>
<p>Note: When Purchasing A Property The Seller Will Generally Pay Both Commissions (Buyer's & Seller's Agent Commissions).</p>
House Flipping Calculator
To analyze your deals efficiently and systematically you may want to consider building your own deal analysis spreadsheet or utilizing a pre-built software like our Flipper Force software.
Our Flipper Force software has a House Flipping Calculator tool that is pre-built with a step-by-step process to help you can calculate your Buying Costs, Holding Costs, Selling Costs & Financing Costs for your projects.
Having a system in place will ensure that you don't miss any costly items in your analysis so you make the right offer for your property!
Learn more about our House Flipping Calculator