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hi guys this is erica from gokuche capital now before i begin be sure to subscribe to our youtube channel and turn on notifications i was just in a real estate forum where a first-time homebuyer was shocked when they received a bill of 14 000 for their closing costs now as anyone who has bought real estate before knows closing costs can quickly add up and this is true for vacant land as well the exact amount will vary from situation to situation but on average at least when purchasing a home and there is a mortgage involved buyers expect to pay between two to five percent of the purchase price and closing costs and this can be the same with vacant land as well sellers on the other hand should expect to pay on average about six percent of the purchase price and this can actually be higher with vacant land depending on the price point since on lower value parcels of vacant land real estate agents may charge a flat fee now you may assume that most of these closing costs will be paid at the time of closing but that's not always true there are also costs that need to be paid up front prior to closing so in this video we're going to go over all of the typical closing costs that both the buyer and seller pay as well as those costs that need to be paid prior to the closing so let's start with closing cost paid by the buyer at closing it's always a good idea to have an attorney help you through the closing on any kind of real estate and you'll need to pay them a fee for their assistance if you are borrowing funds there are a couple financing fees that you will be paying and these quickly add up one way in general to reduce your closing costs is to pay with cash and if you're buying vacant land you can also sometimes use owner financing instead of third-party financing now often the buyer's responsible for the cost of a title search and report although this can sometimes vary based on local custom and what you have negotiated with the seller the buyer will be responsible not only for the title search and report but for their title insurance and if you are borrowing funds from an outside party the lender will also require a separate lender's title policy at the closing table the closing agent will prorate any taxes and hoa dues so you will be responsible for any payment in advance of taxes in hoa dues that cover the time period when you will be owning the property and finally a deed will need to be recorded transferring title to you and you will usually be responsible for paying any recording fees so that covers the buyer what about the seller the buyer is covering a lot of items no so you as the seller won't have much in closing costs correct well as we covered at the beginning of this video that's not entirely true by far your biggest expense will be broker or brokerage fees for your real estate agent now the exact amount you'll pay will vary from jurisdiction to jurisdiction often it's around six percent of the purchase price but when you're buying vacant land it can be a flat rate especially when the sales price is fairly low or if it's not a flat rate it may be a higher percentage like 10 so a big way to save on closing costs as a seller is to sell the property for sale by owner and skip using a real estate agent however if you're gonna do this you'll want to know how to adequately market your property otherwise you may find it sitting for months and months and months you will also want to have an attorney assist you and you'll need to pay their fees and just as the buyer pays their share per rated taxes and hoa dues you will pay your share and then often the seller is responsible for the cost of preparing the deed that transfers title to the buyer and this can sometimes be a separate fee or sometimes it can be wrapped up in your attorney fees depending on who is responsible for drafting the deed whether that's you and your attorney or whether that's the title company and then most jurisdictions charge a tax when property is transferred and that will usually be covered by you as the seller if that wasn't enough there are some additional fees that buyers may need to pay for and these additional fees are for services that assist with your due diligence and the bulk of these services are paid at the time that you request the service not at the closing table this is true with vacant land as well so keep this in mind as you're shopping around for parcels of land here are some of the common services that may be requested prior to closing not all of these are required if you are purchasing a parcel vacant land through cash you may decide to forego all of them but if you are using outside financing some or all of these may be a requirement it's almost always a good idea to have an updated survey commission when buying land this way you know the exact boundaries of your property and you have a chance to catch any encroachments or boundary issues in certain circumstances especially if you are buying commercial property or a property with historic industrial or manufacturing uses on it or in the nearby vicinity it's a good idea to have an environmental site assessment done but the environmental site assessment is a report that gives you an estimate of how likely it is that there is contamination on your property it can also potentially protect you from future liability if contamination is found after you are the owner you may also want to request an appraisal if you're getting outside financing this will definitely be a requirement so that you have a third party estimate of the property's market value and now if you're buying vacant land that does not have access to a public sewer system and you want to build on the property a perk test is a very good idea just so you can verify whether a septic system is feasible or not and there may be some other inspections that you need or would like to have completed such as a wetlands delineation a geotechnical study or soil test and well testing or inspection if there is an existing well on the property also keep in mind that almost all closing costs are negotiable especially if you are purchasing a parcel vegan line with cash and a lender is not involved then buyer and seller can negotiate who pays for certain costs based on the purchase price of the property and the needs of the two parties so do you have any stories about buying vacant land let us know in the comments did you like this video you're going to love our grocery land due diligence program we'll make you a land due diligence expert in just seven days check it out at google capital.com glad and while you're at our website don't forget to explore our one dollar down properties at gocheecapital.com listings finally don't hesitate to reach out with any questions you can email call or text and we will respond as soon as possible so thank you for listening and more to come you