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Let's Talk About Money - by Jenn Jenkins

Let’s talk about money!  Money, money, money, money, moneeeyyyy!!  One of the most recurring questions I get asked is… what does it cost to buy a home?  This question is different for every buying situation but there are 5 key areas where a buyer will spend money throughout the real estate purchase.

1.  Down Payment.  Depending on your loan program, your down payment can range from 0% to 99%.  Yes, you are reading this right – there are loan programs out there where you can put 0% down, depending on the qualifications. A trusted mortgage lender will help you find the loan program that is right for your financial situation.

2.  Earnest Money.  Earnest money is a good-faith measure that follows the sales contract and tells the seller, I ‘earnestly’ want to buy your home 🙂 I typically tell my buyers to estimate about 1% of the purchase price for their earnest deposit.  This money will be deducted from the final amount needed to close the home.

3. Closing Costs.  Closing costs can range from 1% to 4% of the purchase price and depend on whether you are purchasing the home with cash or a loan.  There are costs involved with acquiring a loan and with the title company that is hired to transfer the property from seller to buyer.  Again, every situation has a different number but this is a good estimate. Plus, if you have a stellar agent like me 🙂 we might be able to negotiate that the seller pays for a portion of these costs on your behalf.

4. Home Inspection.  A home inspector will help determine if there are any serious problems with the home that need to be repaired before buying.

This can range from $300 to $1000 depending on any additional inspections that may need to be ordered.

5.  Appraisal.  When purchasing a home with a loan, the bank will order an appraisal to verify the value of the home. This is a cost that is typically paid by the buyer and will need to be paid once the appraisal is ordered. This can cost between $400 and $600.

That's it in a nut-shell! Remember, if you ever have any questions, never hesitate to call.

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