Buying a Home? Expect These Hidden Costs

By Mark Spain Real Estate

If you’ve ever thought about buying a home, you’ve likely set a budget for your upfront expenses, such as a down payment and monthly mortgage. However, many first-time homeowners can overlook several “hidden” costs in the home-buying process. From closing costs to home renovations, there are several expenses to account for in your home-buying budget. Before you sign on the dotted line for your dream home, Mark Spain Real Estate wants to ensure you are fully prepared for a successful home buying process from the beginning to the close. Continue reading to take a closer look at costs to consider when buying a home. 

Buying a Home? Expect These Hidden Costs

Home Inspection

It’s an exciting moment when you submit an offer on your dream home and the seller accepts. However, sometimes your “perfect” home may not be so perfect after all. Before closing the deal, hire a professional, certified home inspector to thoroughly evaluate the property. A comprehensive inspection is the only way to ensure your home is free from foundational defects, including the home’s walls and ceilings, flooring, windows, lighting and electrical, and water and plumbing. While home inspections incur additional costs, they are well worth it – especially if you discover structural issues. In this case, you can negotiate repair terms with the seller before finalizing the deal rather than having to repair them all on your own after closing.

Appraisal Fees

If you plan to finance your home with a mortgage loan, you need to account for a home appraisal in your budget. When entering a mortgage loan agreement, your lender hires a certified appraiser to evaluate your new home’s property value. The appraiser then assesses your home’s condition, documenting the property’s valuable structural features and researching the prices of comparable homes recently sold in your area. The lender then issues your mortgage loan according to the home’s appraised value. 

Earnest Money Deposit

Another hidden cost of buying a home is a buyer’s earnest money or “good faith” deposit. This deposit is critical to a home’s purchase, as it demonstrates the buyer’s intention to abide by the sale agreement and ultimately purchase the home. Buyers give their earnest money deposits after the seller accepts their offer. The monetary amount of your deposit typically depends on your contract, but they usually account for 1-3% of the home’s sale price. Once your transaction processes, you receive your earnest money deposit back. However, if you fail to meet specific deadlines outlined in your contract or walk away from the purchase, you lose your deposit completely. 

Closing Costs

Closing costs include the upfront fees associated with the real estate transaction. These costs can consist of the above-mentioned fees, as well escrow costs, the first year of homeowners insurance, loan origination fees, pest inspection fees, property taxes, title search and title insurance, etc. In addition to your down payment, plan to pay 2-5% of the home purchase price for closing costs. 

Moving Costs

Once the deal is complete and everyone has signed on the dotted line, you may think the spending is over. However, the act of moving comes with a price tag. Consider moving expenses like packing supplies, professional movers, and moving trucks when creating your home-buying budget. Once you’ve covered these costs, you’re ready to cross the finish line and make your move! 

Interested in buying a home? The experts at Mark Spain Real Estate are here to help start your next chapter! With decades of valuable industry experience, our team offers exclusive insight into some of the most popular markets in the southeast, including Atlanta, Dallas, Raleigh, and more. And if you want to put your previous home on the market, check out our Guaranteed Offer Program to receive a competitive cash offer on your home in just 21 days.

Mark Spain Real Estate is here to help you buy or sell a home. Connect with us on Facebook, Instagram, Twitter, or LinkedIn to stay up to date with Mark Spain Real Estate!