Why Should A Buyer Pay for New Construction Builder's Grantor Tax in Virginia?

By
Real Estate Agent with Samson Properties VA0225077251
http://activerain.com/droplet/4Xfn

New construction has been a dominating factor when buying a home especially in the Eastern Loudoun county area of Ashburn, Aldie, Chantilly, Leesburg & Sterling area.

As we know when buying a new home the builder writes a contract. One of the clause/term in the new home purchase contract is "Buyer shall pay for builders Grantor's tax bill." 

 

See below screen shot of one my buyers home purchase contract drafted by a major builder.

 

 

So, what is wrong with buyer paying for builder's tax bill?

If you were purchasing a new resale home in the Northern Virginia area of Fairfax, Loudoun or Prince William county, the home seller would be typically paying for their share of the closing cost which would include Grantor's tax & Congestion Relief Fee. 

 

Again, So what is still wrong with buyer paying builder's grantors tax?

Let's step back and think about it. You receive a closing cost assistance from the new home builder say $7K. Out of the $7K part of it will go towards loan origination fee that their builder's preferred lender typically charges plus Grantor and Congestion Relief Fee you will have to pay on behalf of your home builder.

Now do the math.

What is left behind is a small change for you to truly apply the credits towards your closing cost.

 

Hmmm...now it makes sense!!

 

What can you do about this?

Well, in real estate as we say everything is negotiable. Having a local Realtor who understands the new construction market in the Virginia area is your best bet for helping you negotiate and understand these sorts of hidden clause.

Do note that not all the builders in the Northern Virginia area hold buyer responsible for their share of the tax bill.  Review the sales contract to understand what are your terms & clause.

 

 Ritu Desai is an Associate Broker with Samson Properties with over 12+ years of experience in residential real estate in the Fairfax and Loudoun county area of Northern Virginia area.

Posted by

 
                             
Associate Broker
MRP, ABR, ePRO

NVAR, Life Time Top Producer
NVAR,Multiple Million Dollar Sales Club Member
Samson Properties
Cell - 703-625-4949
Email - info@eNOVAHomes.com
Web: www.eNOVAHOMES.com
 
Residential real estate agent serving Northern Virginia in Fairfax & Loudoun county over a decade and almost $100+M in sales volume experience. 


 
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Rainer
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David Barr
Berkshire Hathaway HomeServices Florida Realty - Sarasota, FL

Who pays for impact fees such as these is debatable.

If the buyer wants to live in a new home in a newly developed area, I think they should pay for it.  The builder is merely satisfying demand.

Jan 11, 2016 08:59 PM #1
Rainer
137,139
Chrissi Chapman Topoleski
Re/Max Real Estate Connections - Haymarket, VA
HOME~There is no place like it!

I was a Title Insurance Agent many years ago when new home builders were building like crazy in Northern VA. I can't tell you how many times buyers came to the table having no idea they were being charged for this. If Realtors were representing them, they also were surprised. I read over my new home client's contracts so I can give them a head's up, and so there are no surprises for me at closing time!

 

Great post!

Jan 11, 2016 09:40 PM #2
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Rainmaker
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Ritu Desai

Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949
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