The following are some facts you should know if you’re thinking about purchasing real estate in Vermont.
Do you need an attorney?
As my father once said, “Why would you ever purchase or sell something as important as real estate without good legal advice?”
Some states do not require or use an attorney. In Vermont we use attorneys to provide the examination of “title,” showing it to be free and clear of encumbrances, and deliver a Vermont Warranty Deed at closing. The purchaser’s attorney examines the title and the seller’s attorney prepares the title.
Attorneys also work with the lenders in preparation and examination of HUDs closing statement.
Is there a transfer tax?
Another important item to be aware of is the property transfer tax fee, for which all buyers are liable. The fee is based on whether you are purchasing the property as your homestead (primary residence) or non-homestead (vacation home, rental, commercial).
For homestead purchases, here is how the tax breaks down:
You pay .005% of the first $100,000 and then 1.25% of the balance of the purchase price. So, if your new purchase is a $300,000 loan, you would pay $500 on the first $100,000 and then $2500.00 on the balance of $200,000, for a total of $3000.00.
For non-homestead purchases the breakdown is 1.25% on the entire $300,000, for a total of $3750.00.
Are there any other fees?
Other costs to consider would be any fuel or utility pro-rations and property tax pro-rations. Since much of rural Vermont uses onsite water and septic, property taxes and fuel pro-rations are the two main fees to be aware of.