February 5, 2019 | Antonio and Jasmin Bradley

Buyers often only think about the overall sale price of a home when searching! But there are several home buying fees or "quiet costs" to be considered as well. We're giving you the top 5 home buying fees that you should expect when buying a home.

Down Payment

If you're buying a home FHA, the down payment is 3.5% down. So if you're buying a house at $100,000, you should expect to pay about $3,500 as your down payment. If you are buying a home VA, if you're a veteran, then it's zero down. But just because you're paying 0% down doesn't mean that there aren't some other fees like earnest money, home inspection and appraisal fee that we will be covering shortly. There are also some city grants that you can take advantage of that are 0% down. The myth is that you have to pay 20% down in order to buy a home. Even though that is well advised if you have the savings for it, but it is not always required. You can buy a home zero down or you could buy a home at 3.5% down.

Closing Costs

You should talk to your realtor and your lender about closing costs. Now, even though we are in some areas of the state that the closing costs are almost customary for the seller to pay on behalf of the buyer. Don't expect that since it is not always the case. If you are in a seller's market, closing costs are usually paid by the buyer. You could use it as a negotiating tool and say, "If you accept my offer, you don't have to pay any of my closing costs". But don't assume that the closing costs will be covered by the seller. This is something that should be written in the contract. You should be talking to your realtor and lender about how much the closing costs will be based on your loan.

Earnest Money

Now we have a video in detail where we explained earnest money, so make sure that you go back and watch that video if you are confused about the meaning of earnest money. In our market,  for anything under $100,000, it's customary that the earnest money cost is $500. Anything above 100,000 is at least $1,000 of earnest money, but I've heard in other places where earnest money is 1-2% of the loan amount. Earnest money represents the money that is at stake in case you don't go through with the loan.

Home Inspection Fee

A home inspection is one of those things where the buyer may ask if the seller can cover the home inspection. You can certainly negotiate that to be written in the contract. But I wouldn't want someone who's selling me something to pay for the inspection for something that I'm buying. I want to make sure that the person doing my home inspection is not biased in any way. Depending on the market, the home inspection fee is anywhere between $250 and $400.

Appraisal Fee

What's the difference between a home inspection and an appraisal? With home inspection, the inspector is paid to find things wrong with the property. So you might have a great house but a home inspector is always going to find something. So be on the lookout for that, especially major things like electrical, plumbing, air conditioner, roof, and foundation. But the appraisal fee verifies the value of your home. You want to make sure that if you're paying $250,000 for a  house that only appraises for $200,000, then you have to figure out that $50,000 gap. An appraisal fee costs anywhere between $450-$550, depending on your area. Sometimes it is covered up front by the lender and then it's taken out with the fees, like closing fees. But ask your lender for clarification!

I always tell my clients when you're going to buy a house, you want to make sure that you have about a $1,000 to $1,500 saved, even if you don't use it. It's better to be prepared for those fees in the beginning than surprised by them later. Remember to keep these fees in mind when looking for a home and negotiating a deal! Be sure to visit our YouTube channel to watch the full video! If you're constantly on the go, you can listen to our weekly podcast through Spotify, iTunes, and Google Play Music.


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