Additional Costs When Buying a Home
You've found the perfect house and can't wait to call it home. You've received your preapproval letter, and you know that the cost of the house is well within your budget. Finally, you're going to have the home you've been dreaming of for years.
Chances are that you've forgotten to factor in additional costs that are involved in purchasing a house. This can mean more money in out of pocket expenses. While you may not be able to foresee all the costs involved, you can plan ahead for things that may arise. This will make things less stressful for you during the home buying process.
Real Estate Agent Services
Having a real estate professional on your side during the home buying process can mean less stress for you. They have the experience and knowledge to save you time and money. When planning, don't forget to factor in the cost for their services. These fees are sometimes negotiable and taken out of the sale proceeds.
While these fees are normally covered by the home seller, there are times when the buyer's agent may have a contract with a buyer that provides for an additional percentage. Make sure you understand the terms of your agreement to make sure you aren't surprised with an fee you weren't prepared to pay.
Home Owner Association Fees
Home Owner Association (HOA) fees are another cost that most people buying a home don't think about beforehand. Most home owner associations have a fee that home owners in their community pay for services and improvements. The initial fee is sometimes paid by the seller as a perk, but you may be required to pay this fee. Be sure to check your agreements for the terms.
Pre-Purchase Inspections
There are important inspections that need to take place during the home buying process. You may not be aware of these, so it's a good thing to check ahead of time to see which ones will be needed for your area. Inspections include building inspections, roof inspections, dry rot inspections, insect inspections, water evaluations, and surveying of the property. These fees can add up quickly if you're not prepared for them.
As with other items we've mentioned, some of these may be covered by the home seller. The terms of the sale will be included in your agreements. Even if the seller isn't covering the total cost of these inspections, they may cover a portion of the fees.
Make sure you know who will be responsible for any repairs that are needed as a result of these inspections. This should be in the agreements and set forth before the inspections take place.
Legal Fees
Check with your real estate professional to get their advice on what type of legal representation you'll need during the home buying process. This could be the difference between paying a flat fee or hiring a lawyer that charges by the hour. Knowing this ahead of time can save you money.
Appraisal fees are usually paid by the buyer. The property appraisal is ordered by the lender to let them know the value of the home. This is important to make sure it lines up with the purchase price.
Closing Costs
Closing costs can cause quite a shock to someone who isn't fully aware of what is included in these fees. When the lender finalizes the loan process and you close on the purchase of the home, you will be asked to pay the closing costs. Closing costs may include the loan origination fee, discount points, initial interest, and taxes. Your lender will let you know an approximate amount to expect when closing.
It's wise to go into the home buying process with a clear direction on additional costs that can impact your wallet. For more information on buying a home, call Ashley Kimble Slaughter at 225-235-9379.
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