Here’s what you'll need to factor into your budget if you’re buying a home soon.
If you’re purchasing a home, you’re probably aware that you’ll need a down payment and a mortgage payment, but you might not be aware of all the other costs involved. Today we’re answering some common questions surrounding the amount of money you need to buy a home.
Do you pay out of pocket for your buyer’s agent?
The simple answer is no. All of the payments made to the buyer’s agent that you choose to work with have already been predetermined by the seller and their listing agent when they sign that agreement. All the work a buyer’s agent does for you upfront, like setting up your home search and writing offers, is absolutely free of charge to you as a homebuyer.
“The appraisal is required by your lender if you’re paying with a loan.”
Does it cost money to get pre-approved?
Again, the answer is no. You can get pre-approved with as many lenders as you like, and it won’t hurt your credit score.
What costs am I responsible for?
Home inspection fees, for one. That will cost you anywhere from $300 to $700 and provide you with a full list of anything that might be wrong with that property. It also gives you great negotiating power in case there are some larger ticket items to take care of.
The home appraisal is something else you’ll have to pay for. It’s required by your lender to ensure the value of the property. They use the appraisal as a kind of checks and balances system to make sure they don’t overpay for the property.
Finally, we have closing costs. They’ll run you about 2.5% of the purchase price of the home, on average. They include prorated property taxes and HOA fees, your credit report, lender fees, title fees, escrow fees, and more.
I hope you had some questions answered today about what it costs to buy a home. If you have any other questions related to buying a home or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
