Why are some real estate costs based on the price?
Examples are real estate commissions and escrow costs. Other than liability insurance, which is a very small part of the expenses, costs are independent of the value of the transaction. Yet it is not unusual to find escrow companies demanding $4 per thousand of the transaction amount (for buyer and seller) and real estate agents demanding 2.5–3% of the sales price.
Just those two costs form a big part of a seller’s closing costs.
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