When you buy a home, all of your costs are disclosed to you in writing. However, you may not have budgeted for some of these “hidden costs,” so I’ll run through them with you today:
1. Earnest money deposit. This is the good faith deposit you put into escrow that takes the home off the market for you. The seller can’t sell to someone else at this point. The deposit is generally 1% to 3% of the sale price, but the good news is that it goes toward your down payment and/or closing costs.
2. Inspections. A home inspection will cost you around $300 depending on the size of the property and will need to be paid out of pocket.
3. Appraisal. If you're getting a mortgage, you’ll have to pay out of pocket for the appraisal as well. This is about $500 to $600 that you’ll pay to the bank.
4. Closing costs. These include things like prepaid taxes and insurance, escrow fees, title insurance, home insurance, lender fees (if applicable), and a transfer tax and generally add up to about 2% to 3% of the purchase price.
This pretty much sums up what you need to bring to the table when you buy a home. Stay tuned for the next video where we’ll discover some of the hidden costs that pop up after you’ve bought your home.
If you have any questions for me in the meantime, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.