Maria is purchasing a home in Rapid City, South Dakota for $320,000. Her lender requires a 20% down payment. At closing, Maria asks her agent whether she needs to budget for a South Dakota real estate transfer tax on the transaction. Which of the following is the most accurate response the agent should give?
Correct Answer
A) No, South Dakota does not impose a real estate transfer tax, so no transfer tax should be included in the closing cost estimate.
South Dakota does not impose a real estate transfer tax (deed tax) on the sale of real property. This is a state-specific distinction that affects closing cost calculations. Neither the buyer nor the seller owes a transfer tax in a South Dakota real estate transaction, and agents must not include this line item in closing cost estimates.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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