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Phage0070 t1_ja0r6ee wrote

When you purchase a house the money you pay goes to the previous owners. I would think that would be pretty obvious.

A newly built house is often built on land which is owned by some kind of developer who paid the construction company to build said house. Your purchase of the lot and house would be the return on the investment of the developer, who makes back the cost of the house and land plus presumably some amount of profit.

In the process of purchasing the house you will often pay a real estate agent or agency to provide various services related to completing the transaction. This percentage is usually split 50-50 between the agent for the buyer and the seller, but the percentage of the overall cut varies.

The bank is usually providing a loan in the form of a mortgage to make this all happen, so it is the bank's money being distributed and then the buyer will be paying the bank back over a longer period of time. The bank collects significant amounts of interest on this long term loan but again the percentages vary.

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