Costs Involved in Buying a Home
(Highlighted items are pre-closing, out-of-pocket costs. In some cases your
loan can be
structured so that you get this cash back at closing.)
1. Earnest Money - $1,000 +
When you make an offer on a property, earnest money is your good faith guarantee that you are serious about buying the property. The amount of earnest money is negotiable. It is NOT an “extra” cost, it is part of the price of the property and it is applied to the price at closing.
2. Home Inspection
Usually based on the size of the house; approximately $300-$500.
The inspector works for YOU, the Buyer, and is paid at the end of the inspection
3. Loan Application - $400
$50 for each credit report
$350 for the property appraisal
No charge for the pre-qualification letter
4. Closing Costs
Usually 3% +/- of the loan amount depending on the lender and the size of the loan. Closing costs are the Buyers’ cost for obtaining a loan and are negotiable. We can negotiate your contract to have the Seller pay these costs, if you are a little short of cash.
5. Homeowners’ Insurance (Hazard Insurance)
The lender requires that you have an insurance policy for the replacement value of your house for the first year. There are many factors that determine the cost of the policy. $500/ year is an average policy cost. For condos, the building fire and hazard insurance is included in the monthly maintenance fee; coverage similar to renters’ insurance is available for your personal property.
6. Title Insurance
The equity and appreciation of your home’s value will be protected with owner’s title insurance. It is a one time charge and is good forever. The Rule of Thumb is $2 - $3 per $1,000 of purchase price.
7. Flood Insurance
If your home is in a flood plain, as shown on official government maps, your lender will require you to buy flood insurance. This can be rather expensive. Unless you have a strong desire to have a river or other water feature on or near your property, it is wise to simply find a home not in a flood plain.
8. Survey (except for condo)
The lender will call this optional. You may need to know what you own for fences, shrubs, lawn mowing, etc. Also, title insurance will not cover boundary disputes without a survey. A survey costs $250 and up, depending on the size of the property.
9. Homeowners Association Dues/Initiation Fees
This fee depends on whether your home is in a subdivision requiring mandatory monthly or yearly fees. Fees can range from $10/year to $1,000/year depending on your amenities. Condo fees in Atlanta can range from $100 - $600+ per month depending on the budget of the complex. Many townhouse communities are fee simple.
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