Okay Guys (and Gals),
Here's my Iowa farm real estate question today: Assume a 60 acre parcel of land is being sold by a titled owner to a cash buyer. Approximately, what percent of the gross sale will get eaten up by administrative costs?
[e.g. Assume parcel sells for $500K. How much money can the seller expect to receive after she pays all of the legal, title fees, sales taxes, etc?]
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500 K transactions can be handled for less than 18% - if it's really good property - or is it tied up in an estate ?
Bring the abstract up, $1200 or less
Couple hundred for lawyer.
Maybe a few little misc fees.
No realitor involved just a private sale should be not much more than that.
Anything more than that in Iowa is just stealing.
if you can get a lawyer to do a purchase agreement and prepare a deed for $200 in today's dollars, please let me know the name of the attorney.
That was about what it cost 20 years ago.....today you would need at least triple that if not more.
At least that is the landscape in Minnesota...maybe you have an 80 year old attorney that hasn't been watching inflation since 2000 or so.
Up here we also have deed tax, which is a small part of a percentage of the total sale...usually paid for by the seller unless negotiated differently. (Minnesota taxes everything...sometimes more than once...the same dollar might be subject to income tax, sales tax, estate tax, excise tax, etc etc....if Gov Goofy still had any real power and could figure out a way to tax air and drinking water, he would...wait, they probably do have sales tax on bottled water...lol)
Outside of that, the gist of your post is right....should not really cost much as a percent of the sale. Income taxes are a much larger issue unless the land was recently inherited and has a stepped up basis.
If she has had it over 10 years there will be no Iowa tax, just Fed capital gains.
If a lawyer can't do it in an hr, hour and a half tops he's over paid. It's only 60 acres. Don't spend time visiting in his office.
The abstract office does all the work.
The last three I bought, one was all done in the mail, the other two in the auctioneers office, last One I sold I just went into the abstracting office signed the papers, got the check and was done in literally five minutes.
The legal expertise advisory economy is also being hammered by technology and inefficiency.
It is really hard to find one that works at anything........ so they get bypassed a lot...
Just went through a process that clearly said to me " This lawyer thinks spell check is as good as reading the document he created".