Q. What Additional Costs Can A Buyer Expect?
A. A common concern I hear from buyers is anxiety over out of pocket cost they may incur.
Initial out of pocket costs to be aware of, before even making it to the closing table, is for inspections and the appraisal.
Inspections are entirely for the information of the buyer, and you may choose what inspections you would like to have. Buyers are strongly encouraged to at the very least have a general home inspection. Your loan type may also require a termite inspection and it may make sense for you to also order additional inspections for radon, septic tanks, wells, swimming pools, etc. You may choose your own home inspector or you may have for your agent to do that for you.
If you are not paying cash, your bank will require an appraisal. The appraisal will be ordered by your lender and you will typically be required to pay for this up front as well. When you receive your pre approval from the bank, this cost should be outlined for you as well as any other costs pertaining to your loan that will be part of your closing costs that are due at the closing table.
Be prepared to spend a minimum of $1000.00 for inspections and appraisals.
The other costs incurred are closing costs. Closing costs are not the same as your down payment! You may have a 0% down loan but you will still have closing costs. Common fees that you will find in closing costs are fees charged by your lender, the title company, any fees that may be charged by your real estate agents brokerage, and any prepaid items, such as the years taxes and the first year of homeowners insurance.
This is another reason it is incredibly important to speak with a lender before you shop! It is somewhat common to request that the seller pay for at least a portion of the buyer's closing cost, however in a competitive market, needing this could keep you from being able to purchase the home you want. Regardless, You need to be aware of those costs and have a plan.
I cannot stress how important it is for you to be proactive when purchasing a home. The beginning is a whirlwind of paperwork and information and it is possible to miss very important details. Simply asking your lender and agent what to expect if you are unclear could help avoid ugly surprises for you!