Hidden Fees to be Aware of When Purchasing a Home

Coins scattered on a desk

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In the meantime, here’s a quick run-down of the hidden costs of purchasing a home to remind your clients about.

Hidden Fees to be Aware of when Purchasing a Home

Purchasing a home is arguably the biggest financial decision you’ll make in your lifetime. Buying a home often requires more money above the agreed purchase – with out-of-pocket expenses you may not expect. As you start the search for your new home, don’t forget there will be other costs associated with your purchase other than just the price of the home. 

Here are five fees to keep in mind as you begin to budget.

Home Inspection

This is a crucial step in the home buying process. The findings that result  from the inspection will help you negotiate price and repairs. Generally, you can expect to pay between $300 to $500 depending on the home and the geographical location.

Title Services

Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure no one will pop up with a claim to the property. Additionally, you may need to buy title insurance to protect the lender and your investment in the home and fees to transfer the title from seller to buyer.

Appraisal Fee 

To qualify for a mortgage, you’ll likely be required to get an appraisal to determine the home’s  estimated value. This is conducted by a third-party company and the cost could land anywhere between $300 and $1,000, depending on the size of the home and what region you live in.

HOA Fees

Many communities have a homeowners’ association (HOA) that charge monthly or yearly fees for general maintenance and updates to common areas like pools and parks within the community. HOA fees range widely depending on amenities and any special assessments. Make sure your agent educates you on these costs, if applicable.

Taxes

It’s not uncommon for the buyer to pay several months of county and city property taxes at closing. The buyer and seller both pay property taxes; the seller pays a prorated amount from the beginning of the tax year until closing. Conversely, the buyer will pay a prorated amount of property taxes to cover the remaining tax year.

As you can now see, there are a lot of costs involved in buying a house other than the price of the home. Closing costs are outlined in your closing disclosure. Your lender can walk you through them.  It is a smart idea to keep all of these potential and realized costs in mind as you budget and search for your perfect home. 

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Posted in: Real Estate Tips