Transaction Costs for a Real Estate Buyer

When we go to buy something the first question that comes to mind is: how much is it going to cost me? Depending on the purchase this may have a fixed price plus taxes, for example clothing or food. Or if it is already a larger purchase with more processes and transactions involved, such as buying real estate; this may have other associated costs in addition to the price of the property. At NATIVU we are well informed about all transaction costs for a real estate buyer before, during and after the entire process.

Read about Transaction Costs for a Seller here

Transaction Costs for a Real Estate Buyer

Costs Before the Transaction

Due Diligence & Legal Advice

This cost depends on your needs as a buyer and are separated from the transaction costs. If you need legal advice on legal processes, to review the purchase contract or others; this cost is separated from the transaction cost and must be fully covered by you. In addition to that if you want to hire engineers, architects, or other professionals to inspect the property then this should be covered on your part as well.

Costs During the Transaction

Transfer Costs

The transfer cost can be negotiable between the two parties. The law does not stipulate who must cover these expenses, only that the costs must be covered. These include: stamps (approx. 1.3%), taxes, fees, and so on. It is customary for the buyer to cover these expenses, but they are fully negotiable between the two parties and can influence other aspects of the transaction. That is, you as a buyer can bid at a more aggressive price but cover the transaction costs in full, so it all depends on the negotiation.

Financing Costs

This cost cannot be fixed because it varies according to the financial institution that you decide to contract with; each institution has its own interest rate at different terms and all this can affect the cost. Additionally, there is the cost of creating the trust that also varies; and the constitution of the mortgage that is broken down as follows: 0.25% from registration, 0.53% for stamps, 0.5-1.25% for the notary.

Costs After the Transaction

Side Costs

Generally these costs are not financial or legal, but maintenance and other contingencies. For example, the cost of leaving the property habitable for you, deposits and installation of basic services, moving costs, etc.

Table of Transaction Costs for a Real Estate Buyer

Due Diligence & Legal Advice	Lawyers	Engineers	Other Professionals	-before transaction-
Transfer Costs	stamps (approx. 1.3%)	transfer tax (1.5%)	fees (staggered 1-2%)	-during transaction-
Financing	Vary according to figure and financial institution	Creation of the trust	Mortgage Constitution: 0.25% – registration / 0.53% – stamps / 0.5-1.25% notary	-during transaction-
Side Costs	Preparation of the property for living	Warehouses and installation of basic services	Moving costs	-after transaction-