Real estate deals usually have substantial transaction costs. Realtors fees average 6% and are paid by the seller. Loan origination fees, title insurance fees, etc., will often cost the buyer 1.5%. These closing costs must be apportioned between the buyer and the sellerfor the property purchase and for its later sale. What horizon should be used? What happens to the property at the problem's horizon?

Purchase price now	$144,000	Purchase Price Later	$160,000
Property Taxes 1.8%	$2,592	Property Taxes 1.8%	$2,880
Insurance	$1,030	Insurance estimated	$1500

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