What Additional Home Buying Costs Should You Prepare for?
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When purchasing a home, there are additional costs that you need to be prepared for.
The first cost is the down payment. Let’s say, for example, you’re putting 20% down. We would ask you to pay it in three different parts.
The first part is the initial deposit, or the “good faith estimate.” This will be paid when you present your offer to the seller. The amount is usually $1,000, but it can depend on what type of property you’re purchasing and the circumstances of your offer. If you find yourself in a bidding war and we don’t have time to collect your $1,000, we’re most likely just going to submit your offer. Other times, if you’re putting an offer on a new construction property, the builder may ask for a specific deposit amount.
The second part is deposited after the attorney review has been completed. An attorney review is when you and your attorney review the contract and share it with the sellers attorney to make sure that everything is going according to plan and everything is in order. When the attorney review is concluded, you will be expected to send at least 5% to 10% of your total down payment to the seller’s attorney’s escrow account.
"Some costs can vary according to the type of property you buy."
The third and last part of your down payment is due at closing. In that check, other costs like your attorney’s fee are typically added. Some attorneys charge a retainer up front, while others are fine with accepting the whole thing at the closing.
Some other fees you will pay along the way include:
- The inspection fee. You pay this to the inspector when they show up to do the inspection.
- The lending fee. These are usually paid at closing, but some of them are paid before you submit your application. Depending on your lender, your application fee will be between $150 and $400.
- Title and insurance fees.
- Tax escrows, which are usually collected during closing.
- Capital contributions and adjustment fees. These are paid depending on when your closing happens and can include taxes and maintenance that maybe the former seller has paid and you need to reimburse.
If you have any questions about this topic or want to know about other fees you may have to pay in your area, please feel free to reach out to us by phone or email. We look forward to helping you!