The Cost of Buying

We all know homes cost a lot.

No matter where you live, the bill tends to be more than your recent Target adventure (debatable because Target is a vortex, but I digress)

Other than the mortgage, buying a home come with some other fees. These aren’t meant to be “hidden” or “secret”, but they aren’t as commonly discussed as say, the down payment and your interest rate.

So, I won’t keep up the suspense any longer. I present to you, the Cost of Buying

  • Inspections: These are paid out of pocket. The most common inspections are Home & Sewer. Expect to pay $600+ total depending on the size of the house.

  • Earnest Money- This is the money you agree to put on the line at the beginning of a transaction. Also called “good faith” money. If you default on the contract (don’t fulfill your part of the contract) the seller can keep this money.

    • Sore News: A buyer must deposit this money shortly after after the seller accepts your offer. Also, the more you offer the more serious you appear.

    • Good News: This is not ADDITIONAL money. It gets wrapped up into your cash-to-close.

    • What’s Cash to Close?

      • This is the grand total you bring to closing day. It’s usually your Closing Costs + Down Payment.

      • Example: $10,000 Down Payment + $5,000 Closing Costs – $5,000 earnest money = $10,000 cash to close

  • Closing Costs-This is the cost of the transaction. This pays the escrow & title team, the processing of the loan, and basically 3rd party involved in the transaction.

    • Closing Costs tend to be 2-3% of the home’s purchase price. The specific number is determined by the particular teams you use. (Escrow company, lender, etc)

    • Closing Costs are paid in cash, (not really dollar bills, but a cashier’s check or wired) at closing.

    • Coming up with $5,000 on top of everything else is the LAST thing you wanted to hear. So if you want a strategy for getting your closing costs covered, shoot me an email. (insert link)

There you have it. By understanding the actual cost of buying a home you can avoid surprises, extra stress, and better prepare for navigating the market! Happy home hunting!

Hannah-Clarke

By | 2018-05-07T20:14:06+00:00 May 1st, 2018|Real Estate|0 Comments

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