Understanding Costs And Fees

Understanding Costs and Fees

Expenses are important during the home-buying process, so knowing more about them is pivotal if you want to purchase with confidence. That in mind, here is an explanation of those expenses when the time comes:

Earnest Money

This money is like a security deposit or collateral for sellers to take their house off the market . It will be deposited into a noninterest-bearing account that no one can touch until closing (or until both parties agree to release it) .

The amount depends on your finances and is typically negotiated during the offer process . The higher the amount, the more you show the seller you’re serious, which grants you more leverage during negotiations .

On average, earnest money is 1% of the purchase price.

At closing, the money can be applied toward your purchase .

Home Inspection

For your protection, we strongly recommend getting a home inspection . Your inspector will look for major issues affecting the safety and security of the home . Home inspections can take between two to five hours and cost approximately $300-$500+ depending on the age, size of the home, and services selected . You should be present for the inspection and be prepared to make a full payment and take detailed notes .

Afterwards, the inspector will give you a report and we will discuss any repairs you want the sellers to make. This will help you make the most educated purchase possible.

Appraisal Fee

Your lender will have the home appraised to make sure that the purchase price in question is appropriate for the property . The appraisal fee is approximately $350 .00-$550 .00 depending on the size of the home .

Some lenders require you to pay this immediately, some have you pay upon closing . The timing will vary depending on the lender but will usually be within two weeks of going into contract .

As part of our commitment to service, The Raines Group will follow up with the lender to ensure everything is completed in time for closing. Home Warranty

The home warranty typically covers all major appliances, mechanicals, and gas lines . It is negotiated in the purchase contract and is typically paid for by the seller at closing . Your warranty will be in effect for one year from closing . Upon expiration, you will have the option to renew at your own expense .

Closing Costs

Your lender will provide you with an initial loan estimate of closing costs, these might include things such as:

Lender fee

Title company fee

Title search

Transaction recording fee

Courier costs

Costs that fluctuate include taxes, escrow amount for taxes and insurance, and closing date . These will all

be paid at closing .

Homeowners Insurance

As the buyer, you are responsible for securing homeowners insurance . It is important to research your options during the specified inspection period of the contract . The cost of your premium will depend on the age, condition, and location of the home .

Insurance is paid one year in advance . If applicable, your lender will escrow this as part of your monthly payment .

There’s a reason why purchasing a house is one of the largest investments you’ll ever make. Allow us to help walk you through all these costs and what they mean for you.