Costs Associated with Buying in Leisure World

I’ve noticed the blog post I wrote a few years ago about Condo/Co-op Fees in Leisure World is my most popular blog post, so I thought you might also want to know the costs associated with buying in Leisure World.  This is something I go over with clients the first time I speak with them, but I thought it might also be helpful to have this information in my blog. 

Any real estate transaction comes with closing costs.  When you buy in Montgomery County, Maryland, where Leisure World is located, you can expect to pay about 3.5% of the purchase price of the home in closing costs, and a bit more than that if you’re using a loan rather than paying cash.  Closing costs include taxes (county, recordation, and transfer taxes), title charges (settlement fees, title insurance, etc.), pre-paying condo fees if the unit has them (Leisure World always has them), and pre-paying Homeowner’s Insurance. There’s also a brokerage fee if you’re using an agent to buy.  If you’re using me as your agent, Samson Properties charges a $345 brokerage fee as part of the closing costs.  All brokerages charge a fee like this, and Samson’s tends to be one of the lower ones.  The buyer’s agent commission is usually paid by the seller. That might change with the new NAR ruling, but at the moment, that is still what I’m seeing.

I say closing costs are usually about 3.5% of the purchase price, but I can’t give you an exact number, because different title companies charge different fees, homeowner’s insurance cost varies, etc.  If you’re a first-time homebuyer in Maryland, you don’t have to pay the state transfer tax, so the total amount you’ll pay in taxes also varies, depending on your situation.  But 3.5% (a bit more if you get a loan), is a good estimate to keep in mind. 

When you buy in Leisure World, you also pay a one-time 3% of the purchase price fee, that goes towards their reserve fund.  At the present time, Leisure World is re-doing their Administration Building and the parking lot at Clubhouse I and the Administration Building.  Their reserve fund pays for projects like that.  There’s also a $350 membership transfer fee.

All of these costs are paid at closing.  So, when thinking about what you can afford at Leisure World, make sure to add about 6.5% to the total, to take care of these closing costs.  Sometimes, you can roll this into your loan (if you’re getting a mortgage), or you can negotiate when making an offer on a home, that the seller pay part of these closing costs.  But buyers often pay the whole 6.5%, so I think it’s important to be aware of it.

If you have any questions about anything in this article, or if you’d like to talk with me about possibly purchasing (or selling) a home at Leisure World, please don’t hesitate to contact me.  Thanks!