If you are a first-time home buyer or someone who has not purchased a new home in fifteen years you need to remind yourself of these fees associated with purchasing your new home. Here are five fees to keep in mind when calculating your budget.
1. Home Inspection: A crucial element in your negotiation, the home inspection alerts you to the necessary repairs that need to be undertaken. You can use the home inspection report to negotiate a reduction in the sale price or obtain a credit for the repair cost. On average, a home inspection can range from $300-$500 depending on your location.
2. Title Services: Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure to no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home.
3. Appraisal Fee: Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $300 and $1,000, depending on the size of the home.
4. Home Owners Association Fee: If you are purchasing a home within a planned development you may find there is an addition fee for the HOA. This fee varies from HOA to HOA both in cost and fee due date. Before you purchase be sure to obtain copy of the HOA by-laws and fee schedule.
5. Taxes: The taxes each buyer pays at the closing table differ, but it is not uncommon for it to be up to two months’ worth of county and city property taxes. Additionally, there may be taxes for the transfer of the home title.
Your realtor or attorney should prepare for you a closing cost sheet outlining all the expenses for closing and how much money you will need to bring with you to the closing table.
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