After years of working with first time home buyers, one thing I have discovered is that people do not really understand the cost of buying a home. There are several things that must be paid for up front when buying a home. These cost are going to be different based on the loan and size of the home. Here are a few bullets on different costs.
Earnest Money: This will vary based on the price of the home. There is not a “set amount” that you have to give. This is money that is usually held by the listing broker, stating that you will not just walk away from the contract for no reason, other than what the contract says you can. It is like a good faith promise. At closing this money will be credited back to you.
Home Inspection: As a REALTOR® I will highly recommend that you get a home inspection. This is something that is not required, but recommended to protect you. The price for a home inspection varies from the size of the home to what all you want the inspector to look for. You can expect to spend anywhere from $250 to $500. Most of my clients spend around $300. I suggest that you call a few different inspectors and ask questions to see which one might be the best fit for you.
Termite Inspection: This is a separate inspection from the home inspection. It is required by most lenders. They are looking for wood destroying insects. The cost can range from $35 to $55. This fee can be added to the final closing cost and paid at closing most of the time. If termites are found, a proposal will be sent to the seller to have the home treated.
Appraisal: This is something that is ordered by the lender to make sure that the home is worth what you are paying for it. Most of my clients pay around $400 for their appraisals. This cost will vary based on the price/size of the home. This is also paid upfront to the lender before they order the appraisal.
These are just a few of the basic things that you can expect to pay upfront when buying a home. Of course you will have the down payment & closing cost that will be due at the time of closing. Other things can come up, well inspections, septic inspections, etc. Your REALTOR® or Lender will be able to help you through the process.
Joshua B. Smith
Exit Realty of the South
(615) 519-2538 Direct
(615) 220-0700 Office
Author:Jeremy Flax Phone: 615-582-0909 Dated: September 5th 2016 Views: 2,807 About Jeremy: ...
View our latest blog posts in your RSS reader. Click here to access.