What are buyers fees?

The purchase is an expense

Both selling and buying a home entails a series of expenses and tax payments that both the buyer and the seller must assume. Buyers are usually more aware of this extra payment and already take it into account when calculating their budget when buying a home, since it represents an additional cost of approximately 10% of the transaction.

However, sellers are not always so aware of the expenses and tax payments involved in the sale of their property. Nevertheless, it is necessary that they take them into account when setting the price of their property in order to avoid surprises with the profit obtained at the closing of the sale.

Likewise, in the event that your home is subject to a mortgage (even if you have already paid it off), you will have to cancel it at the Land Registry before a notary. At this point, the cost will depend on whether you carry out the cancellation through an agency or decide to do it on your own. The price of these steps is around 600 euros. In the event that your mortgage loan is still pending payment, you will be able to cover it with the money from the sale.

Difference between purchase and expense

Therefore, if we sell socks, the expenses will be the purchase of goods to sell (of socks), the rent of the premises, the supplies such as electricity and, if we have someone hired to sell them, the salaries of the personnel; but other expenses that do not correspond to the business, such as if we have a soft drink or if we make a donation, will not be expenses; these are not expenses of our business.

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While the expense, as we have just seen, consists of destining money to cover a necessity, the investment consists of destining money to acquire goods that are going to produce yields to us in the medium or long term.

In the case of a private person, who is not a company, we will speak of expenditure if he buys an apartment to live in it and of investment if he buys an apartment only to speculate because he thinks that it will go up in price and, therefore, that he will be able to resell it with a profit.

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Purchase cost is debtor or creditor

It also costs money to register the deeds signed by the notary. Again, the fees are fixed by regulation and depend directly on the price of the property, although they are usually between 400 and 650 euros.

On the other hand, for used properties, the most important tax is the Transfer Tax (ITP). In this case, the amount depends on the percentage applied to the deeded price and on the autonomous community in which the house is located, although as a general rule a rate of between 6% and 10% is applied. These rates are currently applied:

It should be noted that for VPO, large families, people with disabilities and young people there are usually lower rates. For example, in Madrid, large families buying a freehold property will pay 4% of ITP on the deeded price, provided that the property purchased is the habitual residence.

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If the buyer is going to apply for a mortgage, he/she will have to pay an appraiser to value the property and the bank will know what percentage of financing can be granted. In general, banks are lending an amount equivalent to 80% of the purchase price or the appraised value, although some are financing 90-100% of the purchase price, usually taking the lower of the two. In 2022, the appraisal costs between 250 and 600 euros, depending on the entity performing the appraisal, the type of property and its valuation.  The appraisal is valid for 6 months from the date of issue.

Selling expenses

Table of Contents Knowing this concept is important to understand the profitability of your company and to know if your product or service has a competitive price in the market. Selling expenses reflect all the costs related to the process of selling your finished product.

Selling expenses are all those that are generated during a commercial transaction with your customers. It is important to understand that they are only the expenses that occur during the sale of your goods.

Selling expenses, which are found within the operating expenses of a business, can be a problem for those companies that might have cash flow problems during the process of a transaction.

One of these financing tools is factoring, which has become a great option for companies that require more cash flow so as not to lose other business opportunities while waiting for payment from their customer.

Factoring, besides being a simple option since it does not require collateral, does not generate debt and, in some cases, there is a commercial credit insurance that insures the money in case of non-payment.

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