Identifying costs Associated with Purchasing Real Estate: Part 1

When you first set out to find the home of your dreams, like most people, you may start out by searching for homes online. Once you have found the home of your dreams, and you have identified the price of this home, you may think that this cost will be the only cost associated with the purchase. However, this is never the case as there are many fees that are associate with buying a home or owing real estate. This blog post will attempt to help you understand the breakdown of fees that are associate with the purchase of real estate.

 When purchasing a home there are generally three types of fees associated with the transaction. These costs are as follows: Fees associated with the purchase, fees associated with the mortgage, and fees that the title company charges.

 This blog post will focus on the fees associated with the purchase of real estate.

 

• The Down Payment: This is the fee that most people are familiar with when they think about purchasing real estate. These types of expenses will typically be around three and five percent of the sales price. However, there are some loans that have a zero percent down payment. There are usually other fees associated with a zero percent down mortgage, such as PMI. This is where the twenty percent down myth comes into play. There are numerous programs that make it possible for home buyers to be able to purchase a home with no down payment. Your mortgage lender will be more than happy to provide you with this information.

 

• Earnest Money Deposit: Earnest money is not really considered a fee; it is something that you may want to be aware of because you will need the money ready when put in a contract on a property. Earnest money acts as proof that you are serious about buying the property. A purchase contract itself will only show so much commitment, there needs to be some money involved to protect the seller while they move their house off of the market.

 

• Closing Costs Associate with the Purchase: This is also one of the largest costs that a buyer must pay out of pocket. These types of costs will be covered in another blog post, but for now I wanted to mention them to make prospective home buyers aware of these costs.

 

• Moving Costs: The cost of moving is usually associated with the amount of items a person has and how far they are going to be moving. I have heard stories of individuals paying an upwards of $10,000 to move their belongings across country. The good news is, first time home buyers will typically not have many belongings, thus they can usually expect to pay much less in moving fees.

 

• Home Inspection Fees: Although many times this fee is optional; I usually recommend that all prospective buyers take part in this very important step when purchasing a home. I feel that inspections are important because the real estate inspector will be able to tell you if there are any problems associated with the property. Also, this will allow you to identify any problems before moving forward. In Jupiter, home inspection services usually average around $500 for a standard inspection. 

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