Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don't forget there will be other costs associated with your purchase then the price of the home.
Here are 8 fees/costs to keep in mind as you begin to budget.
1. Home inspection.
This is a crucial step in the home buying process, especially if you are purchasing a freehold/house. The findings that come from the inspection can help you negotiate price and repairs. Generally, you can expect to pay between $300 to $500 depending on the home and the location. The services which are typically covered in a home inspection are: HVAC, Roof, Appliances, Plumbing, Electrical, Ventilation/Ducts, Exterior of the Home, and Structure/Foundation. If you have a fireplace,
2. Title Services: Title Insurance
Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure to no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home.
3. Valuation/Appraisal fee.
Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $300 and $1,000, depending on the size of the home. **in some situations, the lender can/will send their own appraiser
4. HOA fees for planned/secured communities
Many communities have a homeowners’ association that enforces monthly fees. This money is used for general maintenance and updates to areas like pools, parks, and more. Typical HOA fees are around $200 per month.
5. Land Transfer Tax and Property Tax
The taxes each buyer pays at the closing table differ based on a municipal table (which itself is based on the purchase price/value). The average range is between 2.5 to 3% of the purchase price. Municipal Property Tax (if prepaid for the entire year by the seller) will need to be prorated and re-imbursed as well.
6. Legal Fees
Typical closings on the buying side (includes all title search/transfer/registration as well as connecting your mortgage to the property and many other details) can range from $1000 to $3000 depending on the level of detail and your chosen lawyer’s fee schedule
7. Moving/Logistics Costs
Moving companies, or rental moving vehicles (or that 24-pack of beer for your amazing friends who you've volunteered) should also be factored into your budget to get you from point A to point B on the big day!
8. Consumable Essential Items
Once you are in your new home, make sure you’ve got a steady flow of cleaning supplies, tools/tool box (drills/hammers etc), screws and wall-hangers, new child-proofing (if applicable), extra sundries, linens, recycle bins, garbage bags, the list goes on! And Pack a lot of patience and EXCITEMENT!!!