Watch Out for These Fees When Purchasing a Home
By Ryan Taaffe, REALTOR® | Keller Williams Realty
For most people, buying a home is a major financial decision – often the single largest purchase of their lives. Given the significance of the transaction, it’s crucial to know how much money is required. (Hint: it’s not just the sale price!) See below for some of the lesser-known costs associated with buying a home that you should factor in when planning for your purchase.
Even in a highly competitive market, it’s wise to include a home inspection in your offer. Some buyers do waive their right to inspections, but there are other ways to make your offer competitive! The exact cost will depend on the type of inspection and the square footage of the home, but for a standard inspection, you could end up paying $500 dollars or more. If it goes well and you move forward with buying the home, you have peace of mind and you’ve learned a great deal about the home from an expert. If the inspection doesn’t go well and you decide to back out of the deal, the cost of the inspection is a small price to pay to avoid larger expenses and headaches upon moving in. Either way, it’s money well spent.
Depending on your lender, the property you’re looking to buy, and your financial situation, you may be required to get an appraisal before your loan is fully approved. A third-party appraiser is hired to evaluate the home and determine its value so the lender can be sure they’re not overextending themselves. If an appraisal is needed, the buyer is responsible for the cost which can be between $500 and $1,000 depending on the size of the home. Like with the inspection, the appraisal provides valuable information which can give you peace of mind whether you move forward or not.
As you move forward with buying your new home, you’ll need a title search and lots of documentation to show that nobody else can claim the property as their own. Even if you don’t personally think it’s necessary, your lender most likely will require title insurance to protect their portion of the investment. Most (if not all) of your title-related fees won’t be due until closing, but you will need to designate a title company beforehand, so it’s wise to ask for company recommendations up front. Then, before closing, check with your REALTOR® or your title rep to find out which fees are required and how much those fees actually are.
Both the buyer and the seller are responsible for a variety of taxes paid at closing. The amounts vary quite a bit based on where you live, and different states have different customs regarding which side pays each bill. Your REALTOR®, lender, and title rep all can provide estimates based on the area in which you’re searching, but the exact fees will depend on the specific home you buy.
HOA and Condo Fees
Many neighborhoods and communities across Northern VA, DC and elsewhere charge regular fees that cover maintenance, updates, and various amenities. In a condo building, fees might cover a gym, pool, or 24-hour security. Sometimes, they also cover utilities such as water and electricity. A community of townhomes or single-family homes may put fees toward landscaping and snow removal. Along with the recurring charges, you may be responsible for an initiation fee as part of closing on the new home. Fees and payment schedules vary widely from one community to the next, so it is crucial to look into these before closing on a new home.
If you have questions about looking for a new home, writing a winning offer, or anything else related to real estate, I would be happy to help. Please don’t hesitate to reach out at (804) 627-1643 or email@example.com.
Ryan Taaffe, REALTOR® | Keller Williams Realty