Cost of Selling/Buying a House

[TromboneAl]

My wife's best friend lives close by in an incredibly nice house. But apparently she and her husband have gotten some kind of buy a house bug, and they want to move about 20 miles in order to be closer to their grandkids. They've made an offer on a new house.

Their reason for moving is: they are spending too much money on gas driving to see the grandkids.

Now, if they drive to the grandkids 5 times a week, and gas is $4/gallon they'll spend $2,000 per year on gas.

But to sell their $600,000 house, buy a new $600,000 house and move has got to cost well over $30,000 right?

What's the rule of thumb for how much it costs to buy/sell a house?

[hankster]

I can't remember the rule of thumb, but I agree the costs would be substantial. Methinks someone has house fever and is trying to rationalize it.

[GoodSense]

To list a house for sale, expect to pay at least 5-6% in commission alone, since you're paying both the seller's agent and buyer's. Title work (x2) + closing cost = plan on 2%. Depending on if they need a mortgage for the next house, if yes, add another 1%.

However, if the move does make it easier for them to hang out with their grandkids (time savings, mental distance), it may be worth it.

[jIMOh]

My experience is it costs between 10-18%, here is my logic:

1) 6% commission from seller
2) moving costs out of house (Cost me 2k for a 180k condo)
3) storage costs between moves (cost me $500 for a 2 room storage unit)
4) moving costs into new house (cost me another 2k)
5) closing costs for new house (estimate 2% of purchase price)

moving costs include gas, movers, eating expenses day of move(s) and similar. 2k is probably high, but is what I would budget.

1) and 5) alone are 8%.

[W2R]

jIMOH is right on the money. I'd add a few thousand for fixing up the old house to sell. I might subtract a few thousand too, since it might be possible to sell a big house like that for a discounted realtors' percentage.

But then, if it makes them happy, then isn't that what money is for?

Maybe they prefer to spend on this than on other things. There might be quality of life issues for them that they would like to pay for.

[Jarhead*]

Quote:

Originally Posted by TromboneAl My wife's best friend lives close by in an incredibly nice house. But apparently she and her husband have gotten some kind of buy a house bug, and they want to move about 20 miles in order to be closer to their grandkids. They've made an offer on a new house. Their reason for moving is: they are spending too much money on gas driving to see the grandkids. Now, if they drive to the grandkids 5 times a week, and gas is $4/gallon they'll spend $2,000 per year on gas. But to sell their $600,000 house, buy a new $600,000 house and move has got to cost well over $30,000 right? What's the rule of thumb for how much it costs to buy/sell a house?

Probably closer to $40,000.

But that's peanuts compared to losing prop 13 base.

In our county, it;s not transferrible.

It's not transferrible in our county, so if I bought a similar priced property, and had to give up prop 13, it would cost me an extra $6000.00 per year in property taxes to begin with, and beings I started with a higher base, much more in the years come.

If it's not transferrible, big mistake. If it is, no big deal.

[Rich_by_the_Bay]

Quote:

Originally Posted by TromboneAl My wife's best friend lives close by in an incredibly nice house. But apparently she and her husband have gotten some kind of buy a house bug, and they want to move about 20 miles in order to be closer to their grandkids. They've made an offer on a new house. Their reason for moving is: they are spending too much money on gas driving to see the grandkids. Now, if they drive to the grandkids 5 times a week, and gas is $4/gallon they'll spend $2,000 per year on gas. But to sell their $600,000 house, buy a new $600,000 house and move has got to cost well over $30,000 right? What's the rule of thumb for how much it costs to buy/sell a house?

Sounds like they really have a case of "grandkids" bug, rather than house bug, and are just trying to rationalize the move (not that that seems necessary).

[73ss454]

That's not the reason, I think maybe you've been keeping them up playing that Trombone all night long and they can't take it anymore.

[FUEGO]

It could be their time is "valuable" also. 10,000 extra miles per year at an average travel speed of 40 mph would result in 250 extra hours of travel per year. If this individual has a value of time spent driving of $20/hour, that is an extra $5000 per year "wasted" on driving. And add to your $2000/yr cost of gas all the expense of depreciation, maintenance, etc. costs beyond the simple price of gas.

Are the grandparents planning on babysitting the gk's every day while mom and dad are at work?

It might make sense under the right circumstances. But are they even doing this type of math?

[honobob]

Quote:

Originally Posted by Jarhead* But that's peanuts compared to losing prop 13 base. In our county, it;s not transferrible. It's not transferrible in our county, so if I bought a similar priced property, and had to give up prop 13, it would cost me an extra $6000.00 per year in property taxes to begin with, and beings I started with a higher base, much more in the years come. If it's not transferrible, big mistake. If it is, no big deal.

Jarhead, if you're 55 when you purchase the replacement property within 2 years of selling the original property you can transfer your low tax base once to an equal to or lesser property within your current county under Prop 60. There are only about 8 counties left that let you bring your low tax base from other counties under prop 90.

[lazygood4nothinbum]

i'd look at the cost on my nerves. dealing with realtors & the market or drivers & traffic. seems like a wash.

[Bestwifeever]

Watch your friends just get moved in and then their children/grandchildren will move hundreds of miles away for a new job....

[OAG]

Maybe that is the excuse they came up with but actually want to move for other, unstated, reasons. Spending $30K to save $2K are year really is not rational. Must have fallen love with the new house.