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.
FAQ
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.
MENTAL NOTE
Note: When purchasing a property the Seller will generally pay both commissions (buyer's & seller's agent commissions).
What Do Real Flippers Budget for Buying Costs?
Rules of thumb are a good starting point, but it helps to know what other investors actually plug in. Here is what flippers budgeted for closing costs across more than 20,000 deals analyzed in FlipperForce.
Know Your Max Offer Before You Make It
The FlipperForce House Flipping Calculator walks you step-by-step through every cost in your deal: buying, rehab, holding, financing, and selling. In minutes, you'll know your projected profit and the most you can pay for the property. No more napkin math, no more missed costs, no more overpaying.
