Money You Can Expect To See & Spend In a Home Buying Transaction

You may or may not know this already, but before you cut the big check for your new digs - there are a few smaller checks we need to write too. 

We’re firm believers in educated people make good decisions - therefore it is our mission to educate you on everything real estate. 

Here is a list of money you can expect to see (and spend) as a home buyer prior to closing: 

• Earnest Money - Due the day the contract is fully accepted by both parties. This is good faith money. This is money you have a chance to get back if any of your contingencies are not met. Note* Earnest money does have to be signed off by both parties (buyer & seller) on where this money will go, prior to it leaving the title company.
  
  

  • Expect anywhere from $1,500-$10,000 depending on purchase price or nature of the transaction. This amount will be credited to you at closing as part of your out of pocket funds.

• Home Inspection - Due at or before inspection - typically less than 2 weeks after you go under contract. The cost depends on the size of the house and if you have any additional add ons. These are just a few add ons that we see, depending on how many third parties you bring in - this can go up.
  
  

  • Expect anywhere between $450-$550 for the home inspection itself

    • $75-$125 for Radon Test

    • $100-$150 for Water Test

    • $225+ for Sewer Line Scoping (3rd Party)
      
      

• Appraisal - Your lender will order this through the bank right after you go under contract. They will typically collect from you prior to ordering or wrap it into your loan fees at closing.

  • Expect anywhere between $800-900. If for some reason the appraisal needs to be rushed, expect $1,000+
    
    

• Down Payment/Closing Costs - Due at closing. This will be a certified check made out to the title company in which we will be closing. This is all your costs added together. Closing costs are your lender fees, your appraisal (if you didn't pay upfront), and the title companies fees. They can be anywhere from 1%-3% of your purchase price. Your earnest money will be credited to you & deducted from your total amount due. Your lender will give you an estimate of your total out of pocket costs which will be your down payment + your closing costs fees.

While all of these funds are not needed right away, I can’t stress enough how important it is to have them set aside for when you need them. While I can predict all scenarios, what I can do is tell you throughout my experience - having a place for these funds to sit ahead of time takes a lot of stress out of the home buying process. It allows you to focus solely on your transaction.