Buyer’s Closing Costs: Transfer Tax in Northeast PA
Part of the paperwork I provide my buyer clients when making an offer is a Buyer’s Estimate of Closing Costs worksheet.
There are a few items that raise eyebrows among buyers from out-of-state who have purchased property before (but not in Wayne or Pike County PA), and one of those items is the Real Estate Transfer Tax.
This transfer tax, charged on all real estate transactions, is 2% of the purchase price. In some states, the seller pays this tax. However, in our corner of Pennsylvania, the buyer and the seller typically share this tax equally, unless otherwise negotiated.
In the case of bank foreclosures (REO property), it is not uncommon for the bank to require the buyer to pay the entire 2% transfer tax.
This is normal and the way things are done in our area. It needs to be stressed over, and over – real estate is local. Each state has its own real estate procedure. Even within a state, various counties and municipalities may do things differently.
It really is important for consumers to use local real estate attorneys, local title agents, and local real estate agents to ensure a smooth sale. I would not dream of trying to sell homes in an area where I am unfamiliar with the standard practice of real estate.
I once sold a lakefront home in Fawn Lake Forest that took two weeks longer than normal to settle, because the buyers insisted on using their Pittsburgh attorney to handle their side of the transaction. This attorney even admitted to us that “It’s really difficult being out of the loop – I don’t know how you do things over there!”
Ya think? Personally, I think it would have been prudent for that attorney to refer her clients to a local attorney who could serve their needs more efficiently; they would have been in their new home two weeks sooner.
This was originally published on my ActiveRain.com Real Estate Blog. Click here and scroll down (the blog article is the same as this one) to read some interesting comments about transfer tax practices and fees from real estate agents across the United States. It is interesting how differently things are done in other parts of the country (or even the state – Philadelphia charges a whopping 4% transfer tax!)