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Missouri is Ninth Least Expensive State to Close on a Home

Dennis Norman

A new study released by Bankrate, Inc. shows that the costs associated with buying a home are on the rise. Bankrate’s 2010 Closing Costs Survey states the average origination and title fees on a $200,000 mortgage this year totaled $3,741, up 37 percent from $2,732 in 2009.

The good news for us Missourians is that our state had the ninth LOWEST costs associated with buying a home.   Missouri’s average cost is $3,356 which is over 10 percent below the national average.  New York, with average costs of $5,623, had the highest costs in the nation.

What the study did not take into account was transfer fees or a transfer tax.  About three-fourths of the States in the U.S. have some sort of transfer fee or tax that is tacked on to a home sale or sometimes evening a refinancing.  In New York city for example, there is a “mortgage recording tax” that would add 2.05 percent, or in the case of the example above, an additional $4,100 to the tab.  In Missouri we are fortunate not to have any such transfer tax or fee, however with the State and most municipalities facing budget challenges this may not be the case forever.

Fortunately, as I wrote about back in May, the Missouri Association of REALTORS have backed an effort to prevent such a tax from happening in Missouri.   By means of a ballot initiative the plan was to take the issue to the citizens of Missouri in November and allow them the opportunity to prevent this tax, a form of double-taxation, from ever happening in Missouri.  Unfortunately, earlier this month the Secretary of State announced there were issues with some of the signatures on the petition and therefore the issue would not be on the ballot.   Subsequently there has been a lawsuit filed to attempt to get the courts to confirm there are an adequate number of signatures and to get the issue on the ballot in November.  With any luck, we’ll see it happen…

 

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