What are the cost in purchasing a home?

Are you ready to take the plunge into homeownership? It's an exciting journey, but before you dive in, let's talk about the three types of costs involved in purchasing a home. Contract Cost, Closing Cost, & your Down Payment. Did you notice that Realtor Fees are NOT included in this. That is because you as a buyer do NOT pay any Realtor commissions. The seller has already negotiated rates during their listing agreement to pay both the listing agent & the buyer's agent.

First up, we have the Upfront/Contract Cost, which includes the Earnest Money, Option Period $, Inspections, Appraisal $.

Earnest Money: Within the first three days after the contract is executed, you'll need to provide 1% of the sales price as your "good faith deposit." But don't worry, this amount will be credited back to you at closing. 

During the Option Period, which is usually 5-10 days after the contract is signed, you'll have a due diligence period. You can get all the inspections you want and even renegotiate repairs, sales price, or back out if needed. While there's a small fee of $150-$250 for this period, your Earnest Money will be refunded if you choose to back out. Please note that Option Period is generally not part of new construction contracts, only resales.

Next, we have the Inspections, which you'll need to schedule within the option period. The standard TREC inspection provides an overview of the home, and additional inspections like foundation, HVAC, or plumbing may be recommended. 

Moving on to the Appraisal, which is a professional opinion on the value of your home. It's required by lenders for all loans. 

Now, let's talk about Closing Cost, which is a combination of lender fees and title company fees. Your lender can provide you with a Fee Worksheet, and these costs can sometimes be negotiated to be paid by the seller, through what's called a seller contribution in the contract. Make sure to discuss your needs with your lender beforehand.

Finally, we have the Downpayment. The amount varies based on the loan type you choose. There are various options available, like 0% down for VA and USDA loans, and 3%-20% for FHA and Conventional loans. Additionally, there are land loans, construction loans, downpayment assistance, and remodeling loans to explore. Knowing your options is essential!

So, now you're equipped with the knowledge of the costs involved in buying your dream home. Remember, Realtor Fees are not your concern as a buyer, as they are already negotiated in the seller's agreement. If you're ready to make the move, I'm here to guide you through every step of the way! Reach out to me today, and let's get you closer to your dream home!