Buyer’s Out of Pocket Expenses to Buy a Home
As a buyer, please be aware that you could and possibly will have some out of pocket costs and upfront fees to purchase a new or existing home. Some of those buyer’s out of pocket expenses or fees to buy a home could be: (This does not mean every transaction has all these fees, please talk with your realtor BEFORE writing an offer)
1. Appraisal Fee: can range from $400-$600 upfront to the lender before they can order the appraisal. This is very important to do right away so it allows time for it to be completed and returned in time for closing. This are a buyer’s fee.
2. Home Inspection: can range from $325-$450 and due usually at the time of inspection or when ordering it. This is a buyer’s fees. Remember you could find someone cheaper, but you get what you pay for in most cases.
3. Radon Inspection: can cost anywhere from $200-$500 (if you want one). This is a buyer’s fee.
4. Termite Inspection: ranges anywhere from $65 to $85. It is due upfront in most cases and not always required by the mortgage company. In NC it is very common to see a home with termites, so money well spent ahead of time. For VA buyers, this is a requirement to you loan and sometimes can be rolled into the closing cost at closing, but you will not have to reimburse the termite company the home does not close.
5. Septic Inspection and Pumping: can range from $400 to $685 (if seller has not agreed to it in the offer).
6. Survey: can range from $300 to $900 (not required by mortgage companies in NC) this is typically a buyer’s fee if wanted.
7. Water/Well Testing: can range from $65 to $150. This is typically a buyer’s cost unless agreed upon in the contract.
8. Loan Down Payment: depending on the type of loan you get, this can range from $0 for VA (because it is rolled into the back end of your loan at closing), 3.5% to 5% FHA and NC Housing loans and PMI (Private Mortgage Insurance) for life of the loan, 5 to 20% for Conventional loans, $100 to $1000 for USDA. This is additional money outside you closing cost and the seller cannot contribute towards your down payment, but can possibly help towards your closing cost. This is a buyer’s fee.
9. Earnest Money: is typically 1% of the asking sales price and due at the time of the offer being written or within 5 days from accepted offer. This will be held into an escrow account at the real estate company or the closing attorney’s office. This is a buyer’s fee.
10. Due Diligence Fee: can range from as little as $100 to as high as $1,000 and sometime higher. This is required if the seller request it or at the time of the offer to show the seller you are serious about buying their home. It is non-refundable if you back out of the offer during the Due Diligence period (inspection period). It will be credited back to you at closing, on the closing statement (HUD) if you decide to close on your new home. This is a buyer’s fee.
11. Closing Funds: or closing cost are typically 3% of the sales price (this is outside your loan required down payment). It is can also depend on how much the seller is willing to pay or contribute towards your buyer’s closing cost. Whatever is left over, you are required to pay for that remaining balance at closing. That amount will be determined with 24 hours if not a few hours prior to closing and your mortgage officer will call you with that amount. Any money needed to bring to the closing table will be required to be brought in a form of cash, certified money order or cashier’s check. NOT personal or business check. This is a buyer’s fee.
There could be additional fees not addressed here, should you require or want other inspections not mentioned above. This is only to help you understand that it cost money to buy a home now-a-days. We can talk about each of these fees before and while writing an offer. Plus, your mortgage officer will explain a lot of the fees associated above concerning the mortgage process, to help put you at ease. Again, not all these fees will be associated with buying a home, these are fees that could come up and we are the type of agents that wants all buyers to be educated and aware of what it could cost to get into a home in our local market. Searching for the right home can and should be fun. Remember, times have changed and it’s seems to be harder to purchase a home without having to put some type of money down during the process. This is why it is very important that you know what the buyer’s out of pocket expenses could be before buying a home. We can and will talk about each of these fees, so please don’t let this scare you. Finding the right real estate agent or team to help you with your home buying needs is very important. We would hate for you to be blindsided, when purchasing a new home should be fun.