3 Hidden Costs For Homebuyers

Dated: 06/01/2016

Views: 264

It is generally agreed that buying a home can be a stressful process.


In the beginning of the transactions, it's a tense waiting game as you negotiate back and forth on terms and price. Often you have fallen in love with the house that you are making an offer on, and emotions make the back and forth process nearly unbearable at times.


From there, it's a race to meet deadlines, complete inspections, get your mortgage, and release contingencies. 


Then there is the long wait until closing. And then happiness. 


But along the way, surprises are not welcome. Especially surprises that force you to crack open your check book. So rather than blindsiding you for more money on top of what you already have to pay at closing, here are 3 costs  that you should know about.


HOME INSPECTION - As a buyer, this is the most important expense that you will have. The reason for that is when you need to know if there is anything wrong with the house, you find out now. Inspectors will go through the house from top to bottom checking the structure, roof, foundation, mechanics, plumbing, electrical, and general condition, and then they report their findings to you. I always recommend buyers attend the inspection simply for the fact that you can learn a ton from the process. Depending on the size of the house you are buying, the inspection can cost anywhere between $350-$450. There are also inspections for things like septic systems, wells, fireplaces/chimneys, pools, structural, etc. There would all be extra costs as well.


THE APPRAISAL - When you apply for a mortgage, the bank has to make sure they are giving you the right amount of money. It doesn't make sense for them to give you a loan for more money than the house is actually worth in the market. So in order to determine how much they should be forking over, they send an appraiser out to determine how much the house is worth. They will use things like overall condition, upgrades, location, and comparable sales in the area to help figure out a number to work with. If the appraisal value comes in less that what you are looking to get as a mortgage, you would have to make up the difference yourself. Ouch.The cost of the appraisal is typically a few hundred dollars, and in most cases is included on your closing sheet. There is a chance that you will have to pay it up front though, depending on the lender.


THE ATTORNEY - Paying the attorney is actually a good thing, as crazy as it sounds. Clearing this debt means that you are now a happy homeowner. It also means that the attorney has successfully completed the title work, survey, and abstract. They also draft all of the closing documents and make sure that when you sign on the dotted line, there will be no issues with the deed moving forward. Depending on the attorney the fee will either be wrapped up in the closing costs, or you will cut a separate check. They charge between $400-$500 on average. 

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